According to several disparate sources, consumer spending and shopping habits appear to be changing in a dramatic and long-term manner. Evidence of this can be seen in one survey conducted by the market research firm NPD Group. As the survey discovered, families aren't eating out as much as they did just a few years ago.
According to NPD, visits to restaurants by families have declined by about 1 billion over the past six years. Family outings, which represent an estimated $83.7 billion, or 20% of total restaurant sales, have dropped across all segments and meal periods; especially hard hit was supper.
In the instance of casual dining, receipts were at a six-year low for the period ending February 2014. Starting in 2009, NPD noted, casual-dining traffic declined at a rate of 2% each subsequent year, with total losses of some 7.1 million visits. A weakened economy factors into the decline, but NPD also found that there are other barriers limiting families from dining out, including the perceived value for the money and restaurant environment.
Additional evidence of this trend can be seen in the second bankruptcy filing in less than three years by the iconic restaurant brand Sbarro. The family-friendly pizza chain cited in legal papers an "unprecedented decline in mall traffic."
According to the experts, online shopping has taken an especially big bite out of foot traffic at brick-and-mortar locations. As of the fourth quarter of 2013, online sales account for some 6% of total retail spending. That number nearly doubles the share from 2006 on a trend line that shows no signs of flattening out.
This is bad news for those vending and amusement operators who rely on casual restaurants and mall-based retailers to attract their customers. And the forecast is not expected to improve any time soon. Some of the best-known strip mall anchor stores have announced massive closings. For instance, Staples currently has plans to shutter 225 of its U.S. stores, while Office Depot announced the closing of some 400 locations by the end of 2016. Other retailers who have recently either closed stores or announced plans to shutter locations are Radio Shack, Sears, Barnes & Noble and J.C. Penney. One particularly troubling headline in the business press recently announced that strip malls are on "a march toward extinction."
While many of these venues are not typical of coin-op locations, operators continue to rely on high-volume retailers to attract foot traffic. If the current trend continues, which seems likely, operators will be forced to rethink location strategies. That could involve following the foot traffic to less vulnerable locations, such as 24-hour convenience stores and mom-and-pop specialty stores.