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For Immediate Release September 17, 2008
Contact: Cristi Allen
callen@decisionanalyst.com
Phone: 817-640-6166

Arlington, Texas (September 17, 2008)— Over the past 30 months, consumers in the U.S. have cinched up their belts and cut back on eating out, as indicated by data from the Health and Nutrition Strategist™, a large ongoing survey on U.S. health habits that tracks monthly visits to 160 different restaurant chains in the U.S. As shown in the chart below, the number of restaurant visits in the U.S. has trended down since the first quarter of 2006 (which is arbitrarily set to an Index number of 100, to serve as a benchmark for following quarters).

By the fourth quarter of 2007 and the first quarter of 2008, restaurants visits had fallen by approximately 10%, compared to the first quarter of 2006. This is a stunning reversal for an industry that has enjoyed largely consistent growth over the past 30 years. Why have restaurant visits declined so dramatically? The primary reason is inflation. “It’s the rising cost of gasoline, electricity, medical services, foods, etc. Inflation has sapped the consumer’s purchasing power,” said Jerry W. Thomas, President/CEO of Decision Analyst, the research firm that conducts the survey. “The Bureau of Labor Statistics (BLS) reports that inflation has been relatively tame during this whole period, but the restaurant visits data indicates a grimmer reality. It seems highly probable that the BLS has understated (and continues to understate) the true inflation rate (i.e., as officially measured by the Consumer Price Index).”

According to industry sources, overall restaurant sales revenue is essentially flat right now, with no uptrend evident. The no-growth sales revenue trend is consistent with the measured decline in average number of visits. That is, rising menu prices are masking declining traffic (or visits). The declining-visits data prove that restaurants in the U.S. are bearing the brunt of the economic downturn. Eating out tends to be discretionary; when times get tough, consumers reduce the number of visits to restaurants.

This downtrend in restaurant visits is further evidence of recession in the U.S. economy. Eating out is not viewed as a luxury by consumers in most instances, but rather as a necessity. Only severe economic distress would force consumers to reduce their restaurant visits by the magnitudes recorded.

Some industry experts have speculated that casual dining customers have traded down en mass to fast food restaurants over the past two years. The Health and Nutrition Strategist™ data does not fully support this premise. During this time period, the data indicate that fast food restaurants have only gained one or two share points versus casual dining.

Some restaurants have trended up during this time period, while others have fallen behind. Subway, McDonald’s, Burger King, Chick-Fil-A, Sonic, and Dunkin’ Donuts have gained market share, for example, while Starbucks, Taco Bell, and Wendy’s have trended down in market share.

An interesting footnote to the restaurant visit data is the bump in the second quarter of 2008. It appears that U.S. consumers grabbed their vote-for-me gift checks from Washington and rushed to the nearest restaurant to spend the money. It’s a bright promise that consumers will resume their profligate eating-out ways, just as soon as the economy improves.

Methodology

Decision Analyst’s Health and Nutrition Strategist™ (HANS™) study is conducted monthly online using the American Consumer Opinion® online panel. HANS™ is an integrated knowledge base of health habits, nutritional attitudes, food, beverage consumption, and restaurant usage. The data was collected from January 2006 to June 2008 using a statistically balanced sample of 4,000 adults annually. The margin of statistical error ranges is approximately 2.0%, plus or minus, at a 95% confidence level.

About Decision Analyst

Decision Analyst (www.decisionanalyst.com), based in Dallas-Fort Worth, is a leading international marketing research and marketing consulting firm specializing in advertising testing, strategy research, new product development, and advanced modeling for marketing decision optimization. The 30-year-old firm delivers competitive advantage to clients throughout the world in the consumer packaged goods, telecommunications, retail, high technology, medical and pharmaceutical, utilities, and e-commerce industries. In addition, Decision Analyst operates the American Consumer Opinion® online panel, which has more than seven million participants and is one of the largest survey panels in the world.

For additional information contact:
Cristi Allen
Publicity
Email: callen@decisionanalyst.com
Phone: 1.800.ANALYSIS (262.5974)
Address: 604 Avenue H East
Arlington, TX 76011

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