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Traffic to quick-service restaurant chains declined 2.3% in the second quarter, according to new data from Revenue Management Solutions (RMS), continuing the industry’s struggles with customer counts amid consumer frustration over price hikes.
But the traffic figures did improve compared with the previous quarter, and there are signs that operators are more cautious on price hikes.
The 2.3% decline was a sequential improvement compared with the 3.5% decline in the first quarter. That could be due to easier comparisons, better weather or more value focus by a larger number of chains.
Yet many of the value offers running at fast-food chains didn’t take hold until relatively recently, so the full effect may not be seen until the third quarter data comes out.
Other industry data has indicated that value offers from major chains, including McDonald’s and Starbucks, have worked to generate traffic, at least in the short-term.
Still, operators have cut back on price hikes. Average prices rose 2.9% year over year in the second quarter, according to RMS. That was down from a 4% average price increase in the first quarter, and well below many of the price increases the industry took last year to adapt to high inflation.
RMS data said that net sales at fast-food restaurants increased 1.7% in the second quarter, as customers paid higher prices and ordered more food per transaction in the period.
Traffic at fast-food chains has also shifted away from drive-thrus toward other formats. Delivery traffic grew 12.8% in the second quarter, continuing its strong growth, while dine-in traffic grew 8.3% as that business continued its recovery. Takeout grew 7.6%.
Drive-thru traffic, on the other hand, declined 10.9%. Drive-thru remains the source of the bulk of fast-food customer counts.
The continued growth of delivery could be an indication that wealthier customers, who are more likely to order delivery, are less concerned about rising prices.
The industry is paying closer attention to traffic counts this year as brands work to get people back into their restaurants. Price increases frustrated consumers and many, particularly lower-income diners, either traded down to cheaper restaurants or traded out of restaurants altogether.
McDonald’s, Burger King, Taco Bell, Subway, Wendy’s and other fast-food brands have shifted more marketing to value, hoping that more persistent marketing of discounted meals could get customers back.
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