Are Business Lunches Dying, or Eating Lunch Out in General?

It has not been much of a secret that consumer spending on casual dining has seen a drop of late. Now it turns out that restaurants are also getting bit when it comes to lunch spending.

NPD has released its report for the second quarter, which is even before the more real-time views we have heard about in the third quarter, showing that total lunch visits in restaurants was down 4% from the second quarter of 2015.

What matters here is that this was shown as the largest decline in visits of all mealtimes after adding up visits for breakfast and dinner. There could be more than one issue at work here.

NPD attributed the lunch decline to more people working from home, as well as an indirect impact of people spending more time shopping online. This latter excuse is serious, because it has implications above and beyond spending habits. It means that fewer consumers are out during the work day visiting malls and brick-and-mortar stores where dining establishments are located (or are closely located).

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Another issue that is having an impact on the trend is that restaurant menu prices have risen. NPD even showed that the average lunch check was up as much as 5% in the second quarter of 2016 in at least some food segments. NPD’s report said:

All restaurant segments, with the exception of traditional quick service restaurants (QSRs), are losing visits, finds NPD. This is particularly true of casual dining and fast casual (a quick service category) restaurants where traffic was down in the quarter ending June compared to same quarter last year by 6 percent and 9 percent respectively. Weekday foodservice lunch visits declined by 7 percent.

24/7 Wall St. would point out that this ties in with the ability to generate savings for consumers who might be watching their spending.

One interesting view of this was a report on how your laziness might be costing you serious bucks. Andrea Woroch recently sent 24/7 Wall St. a list of issues on several ways that summertime laziness can cost you money. One such issue was being too lazy to take that old familiar brown bag lunch to work with you. She said:

Fixing yourself lunch everyday takes effort, plus dining out with coworkers means getting a glimpse of that summer sunshine everyday. However, this habit takes a big bite out of your budget, to the tune of $1,043 per year according recent reports. Imagine the debt you could pay down or the vacation you could enjoy if you saved that $20 per week instead? Lunch prep doesn’t have to be a time-sink, either; spend just two hours on Sunday preparing make-ahead meals to last you the whole week.

If NPD is right about the severity of the food price hikes in restaurants, that brings up another situation. Kroger recently pointed out how it is fighting actual food deflation at this time, and that was just in the past week. If food prices are falling but restaurant tickets are rising, then perhaps all that increase is from rising labor costs in the establishments.

However you cut it, the trend is not in favor of the public restaurant chains at this time.

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