We all hear and read about rising income inequality and the wealth gap and these trends certainly appear to be impacting restaurants in the USA as well. A recent study by NPD Group found that visits to fine dining concepts increased by 5% in 2013 compared to the previous year, the first growth in customer counts since before the financial crisis. In fact, fine dining gains in visits were ahead of the entire US food service industry which was basically flat in 2103. While fine dining represents a small share of overall food service traffic, it does account for 14% of the total consumer spending given the higher guest checks.
QSR still accounts for the vast amount of traffic (78%) but the spending per person is only about $5. Casual dining, as is well reported, is still struggling, with the quick casual segment taking many of their customers.
So the USA market is reflecting the wealth trends noted above. Fine dining, quick casual and fast food are still showing signs of life but family and casual dining who serve primarily the middle class continue to struggle.
A recent book by the French economist, Thomas Piketty, Capital in the 21st Century, suggests that more bad news is on the horizon. He notes that the ratio of wealth to income is rising in every developed country and the trend is expected to continue. The future, he surmises, may look like a replay of the 19th century, where economic elites primarily inherit their wealth rather than work for it.
Not a very promising note to start with in 2014!