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January 2017 WINES&VINES 21 WINE INDUSTRY NEWS Further, Moramarco explains that since 1987, consumer expenditures have been tracked separately for limited-service restaurants and full-service restaurants (which for this discus- sion includes drinking establishments). Since this data has been available, roughly 45% of consumer spending has been in limited-service restaurants. "Nothing indicates that consumers are moving more of their spending away from full-service restaurants and toward limited- service restaurants," he said Moramarco added, "In full-service restau- rants, approximately one-third of consumer expenditures have been for beverage alcohol. Overall growth is continuing in the full-service sector, and the share of expenditures for bever- age alcohol is remaining consistent." Nevertheless, restaurants overall are being hit by many trends. NPD reports that squeezed consumer wallets, the rising cost of dining out and changing needs and wants have brought the U.S. restaurant industry traffic growth to a halt in the first two quarters of 2016 and into the negative in the third quarter. Total food-service visits declined by 1% in the third quarter compared to the same quarter last year, and quick-service restaurant traffic, which represents 80% of total industry visits, dropped for the first time in five years, according to NPD's ongoing food service market research. Traffic at U.S. fast-food restaurants fell 1% in the third quarter to mark the sector's first traffic decline in five years, said NPD. "The term 'Growing your business in a 1% world' has become a popular mantra for the restaurant industry after six consecutive years of annual traffic gains of just 1%," says Bonnie Riggs, restaurant industry analyst at NPD. "However, over the past six months, restaurant industry traffic growth has come to a standstill and quick-service restaurants, which have been the traffic growth drivers, are now experienc- ing a slowdown in visits." Riggs, who recently authored the report "Losing Our Appetites for Restaurants," points out that there are multiple reasons why con- sumers have pulled back on visiting restaurants and chief among them is cost. She states in her report that rising health care costs and/or student debt have reduced consumers' disposable income. According to a survey of the longitudinal panelists participating in NPD's receipt-mining service, Checkout Tracking, 75% of the respon- dents who have decreased their visits to res- taurants say they watch how they spend their money on most or all purchases, and a high percentage of these respondents think that restaurant prices are too high. The cost of the average restaurant meal has risen 21% during the past decade, and with lower grocery prices the price gap between eating at home and dining out is widening: 82% of all meals are now consumed at home. "The marketplace is changing, and despite improving economic indicators, the consumer landscape is fundamentally reshaped," says Riggs. "What hasn't changed and won't change is the consumer's need for food service; it saves them time and provides them with an experi- ence. Restaurant operators will need to look for ways to differentiate themselves from the competition. They will need to find the means to stay relevant in consumers' minds—innova- tive products, unique promotions, competitive pricing, stating the benefits of eating at restau- rants compared to home—while delivering an enjoyable experience." —Paul Franson "Nothing indicates that consumers are shifting their share of dollars away from on premise." —Jon Moramarco, BW 166 30th Anniversary 1986-2016 Your art here Your logo here Wine • Beer • Spirits • Cider & more Custom Decorated Glassware for all your favorite beverages: www.ARTonProducts.com sales@artonproducts.com (804) 462-5800 PO Box 340, 43 Lively Oaks Road, Lively, VA 22507 The best quality and service for all your drinkware needs Experts in 1 to 5 color direct print Family owned and operated since 1986 PO Box 340, 43 Lively Oaks Road, Lively, VA 22507 Gomberg, Fredrikson & Associates Market Research For e Wine Industry Products include: · The Gomberg-Fredrikson Report: "The Executive Marketing Report of the Wine Industry" · WineData Wine Pricing Report: Competitive supplier pricing for more than 13,400 products · Distributor Market Service: Gain a competitive advantage by analyzing your position in the wholesale market www.gfawine.com • 707.940.3922 • inquiry@gfawine.com We perform extensive market research and data collection to create the wine industry's leading databases and reports