After Three Long Years, Families Dining Out Again

Grab the crayons and the kids' menus, families are dining out again.

Restaurant visits from families or parties with children in tow this past summer rose after three years of declining traffic, according to market researcher NPD Group.

Rick Rusing | Stone | Getty Images

While this is a positive sign for both the restaurant industry and the overall economy, the gain was modest. But it may be another sign that the economy is picking up, albeit slowly.

Visits from parties with kids rose 1 percent in the three months ended August versus the same quarter a year ago.

“Although the visits increase reflect just one quarter, the return of parties with kids is another sign that business is beginning to pick up for the restaurant industry,” said Bonnie Riggs, NPD’s restaurant industry analyst. “Parties with kids are integral to the industry and make a significant contribution in both volume and sales.”

According to NPD, last year, even with visits down, families or parties with kids accounted for 14 billion meals and snacks and $70 billion in sales. That's about 35 percent of all restaurant visits.

Last year, the restaurant industry saw its first decline in more than three decades. Much of the decline came from fewer restaurant trips by families with children and by young adults. Workers brown-bagging their lunch instead of dining out also hurt the industry.

As this year progressed, the rate of the year-over-year declines have eased. This latest information hints that further improvements may be yet to come.

It will be interesting to see how restaurant sales fare going forward. NPD expects restaurant sales to head into positive terrority in the fiscal fourth quarter of this year.

But Riggs, said it will be a long, tough road back. She projects that sales will only grow 1 percent for the next year or so. "This means it will take a year or longer to get back where we were before the recession," she said.

In the meantime, she expects that battle for market share to continue.

Throughout the downturn, restaurant chain operators such as Darden Restaurants , the operator of Red Lobster, Olive Garden and other chains, and Ruby Tuesday have been waging a fierce war. Some chains have offered customers steep discounts to lure them in the door, while others, such as Darden, have hosted special events or served limited-time specials, to tempt diners.

The recent gains in traffic have benefited quick-service chains such as McDonald's and family-style chains such as DineEquity's IHOP the most.

According to Riggs, many of the family-style chains have been promoting "kids eat free" deals, and that may have helped drive in more customers.

"We're starting to see the light at the end of the tunnel," Rigg said. "We're going against extreme weakness a year ago,but we're moving in the right direction."

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