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Fast Food Sales Decline; More Folks Eating at Home

  • Susan
  • May 8, 2009
The Best of the Worst
Fast Food sees a decline

Despite previous cheery reports, it appears that fast food restaurants are not as recession-proof as initially thought.  Even with the introduction of cut-rate food items at or around the dollar price point, the fast food industry experienced a decline in traffic during the quarter that ended in February. This was the first decline in six years, according to research by NPD in their Consumer Reports on Eating Share Trends.

Although it was only a one percent drop, this is significant, since fast food chains have been the least likely to be affected by the current economic downturn that has forced budget-conscious consumers to eat more meals at home.

One way the fast food sector has been successful in keeping their head above water so long is by offering cheaper menu items.  Wendy’s has been offering a Super Value Menu for years, McDonald’s touts their Dollar Menu and Taco Bell is promoting its Why Pay More menu of 79- to 99-cent items.

“… all the brands are using value to get sales,” said David Ovens, chief marketing officer of Taco Bell.

Even with the efforts to minimize food item prices, dismal unemployment figures that continue to creep up are sending patrons scampering to find cheaper ways to keep their families fed as they avoid restaurants at all price points.  Families are discovering the joys of home cooking and the added benefit of saving money.

Because you’re not paying someone to shop, prepare, serve the food and do the clean up, you can save at least 75 percent by eating at home, over what you might spend in a restaurant for the same meal.

So while fast food sales are declining, other market sectors are benefiting from the new “eat at home” movement.

There’s been a resurgence in cookbook sales, particularly those about slow cookers, value meals, canning and preserving, said Mary Davis, a spokesperson for book retailer Borders Group Inc.   The number of cookbooks sold in the past year rose 9 percent, according to Nielsen BookScan, the world’s first and largest continuous sales monitoring service.

Online food and recipe sites have also been seeing increased traffic, as consumers browse through tens of thousands of recipes, menus and meal plans to find new ideas for low cost ingredients. (Have you checked out the FriendsEAT.com recipe section lately? There are many great meal ideas that have been personally prepared and tested by fellow foodies.)

Money saved by eating at home has given some the means and justification to invest in new kitchenware, tools and utensils. Walmart, the world’s largest retailer, said sales of housewares were strong.   Even Sur La Table , an upscale kitchen retailer, reports that sales have increased almost 5 percent over last year, which is remarkable, considering their merchandise is usually out of the price range of budget conscious consumers.

Cooking and food magazines have had a good year, although they are all competing for what appears to be a finite amount of advertising revenue. Some magazines have slimmed down their content, but others quickly shifted their focus to budget meals and ideas, helping boost their circulation.  Bon Appetit executive editor Victoria von Biel said circulation is at an all-time high of 1.4 million. “Times are tough,” she said. “Even our affluent readers are going home and nesting a little bit at the moment.”  Bon Appetit is catering to the cost conscious crowd by covering ideas on how to eat better for less, including how to host an inexpensive dinner party and how to cook a week’s worth of meals for under $100.

What all this seems to say is that Americans are resilient and will find ways to cope with the lingering economic doldrums.  For now, consumers who used to frequent restaurants at all price points seem to be saving their dining out experiences for the weekend.  “Perhaps they’re looking for a chance for a little escape via affordable luxuries, amidst the economic gloom and doom,” said Michele Schmal, the vice president of food service product development at NPD.

Things will eventually turn around, although no one knows how long it will take.  But will things ever go back to “the way they were?”  Only time will tell.

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