We probably know of at least one small independent restaurant in town that we love to dine at. May be we have noticed our favourite has appeared in a few more places. A new report from The NPD Group -a market research business has data to show just what is backing up that perception of food service in the USA, especially in the leading US cities.
NPD’s biannual restaurant census looked at the changes taking place in the food service sector, especially restaurant service amongst the smaller businesses that offer more niche but attractive offerings.
It seems that whilst the number of independent restaurant units has declined by 4 per cent from last year in large cities, a number of these types of restaurant have successfully grown from just one to two units to form their own micro-chain. A micro-chain is between 3 and 19 units and is usually a locally based food business. They represent a diverse and niche segment of restaurants that typically reflect the emerging trends in food, a positive customer experience, and make the right connections with restaurant customers in today’s competitive foodservice environment.
Annie Roberts, vice president of NPD’s SupplyTrack stated:-
“Micro-chains are bringing to the restaurant scene a new attitude and perspective. Many are successful because they have their finger on the pulse of today’s restaurant consumer. They are often locally-based and offer their customers a creative concept, great food, and an enjoyable experience. What’s not to like.”
Evidence that micro-chains are resonating with today’s consumers is the growth in the unit counts of these chains in major cities. One particular city, Dallas-Fort Worth enjoyed the strongest gain in micro-chain units, up 5 percent from last year. Micro-chain units also increased their numbers in Orlando (up 4%), Atlanta and Washington DC (up 3%), Houston, Los Angeles and San Francisco (up 2%) and Chicago (+1%). Micro-chain unit counts were flat however in New York City and Philadelphia and dropped by 2 percent in Boston.
NPD’s SupplyTrack tracks the monthly sales of every product shipped from leading broadline distributors to each of their foodservice operators. Commonly referred to as a one-stop shop, broadline distribution is often used by retailers and restaurants that purchase a variety of items from a single distributor. It’s viewed as an effective method for a buyer to order a wide variety of consumer goods.
Micro-chains also fared best among restaurant chain systems who are represented by the small and major chains. This was in terms of orders placed and spend with U.S. broadline foodservice distributors. The micro-chains increased their total spend for foods and goods with broadline distributors by 5 percent and cases ordered by 3 percent in the first quarter of the year compared to last year. Micro-chain spend and cases ordered from broadline foodservice distributors also increased in many of the major markets where there was also unit growth. In comparison, the total dollar spend for all restaurant and retail foodservice operators with major broadline foodservice distributors was 2 percent and cases ordered were up 1 percent.
The development of micro-chains is best viewed as an evolutionary process in growing a food service business. In time, if popular enough they become the next major restaurant operations across the nation.
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