Restaurant Roundup

Independent Restaurants Increase Spending With Suppliers

The number of independent restaurants continues to decline in the United States, but they still make up more than half of the country’s eateries, and account for 15 percent of total restaurant operator spend.

That’s according to research released on Monday (March 21) by The NPD Group.

The research firm said that “while the number of independent restaurant units in the U.S. dropped by 3 percent, 346,105 independent restaurants remained opened, which represents over half of the 647,288 commercial restaurant units in the U.S.” Those numbers are based on an NPD restaurant survey conducted late last year.

The research found that independent commercial restaurant operators will spend $39 billion this year with food service manufacturers, which translates into 15 percent of the total spend in that area.

These findings come amid other data that shows how restaurants are making investments to keep up with changing consumer behavior. The latest Restaurant Readiness Index from PYMNTS found that the deployment of in-store kiosks in QSRs increased 4 percent year-over-year in the fourth quarter of 2017. That accompanies a 7.4 percent increase for in-app loyalty programs.

The Restaurant Readiness Index said that QSRs are “doing a decent job of implementing traditional in-store features, but very poorly when it comes to innovative technologies. Digital wallets increased by 3 percent, but beacon technology stayed at a minuscule 2 percent and curbside pickup dropped to 0 percent.”

The independent restaurants analyzed by NPD are facing challenges that go beyond payments and technology.

“Restaurant visits overall have been flat to declining for the last several years, and visits to independent restaurants have declined by 2 percent over the last five years,” NPD said. “In the quarter ending March 2018, independent traffic declined by 1 percent, and total restaurant visits and chain traffic were flat compared to the same period a year ago.”

But NPD said independent restaurants are showing signs of enduring health.

Operators of those businesses “have been increasing their spending and orders with broadline food service distributors,” the reports said. “Independent operators, who represent a third of broadline food service distribution dollars, increased their purchases with leading broadline distributors by 2 percent and cases ordered by 2 percent in the quarter ending March 2018 compared to the same quarter a year ago.”

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