The widening wealth gap between the rich and the poor in the U.S. is taking a toll on fast food chains.
Traffic at quick service restaurants, which have an average check size of about $US5, were flat in the year ending June 2014 compared to same period last year, while traffic at fine dining restaurants increased 3% over the same period, according to data from The NPD Group.
The graph below illustrates the differences in traffic between high-end and low-end dining over the last three years.
Fast food chains account for 80% of restaurant visits, so declining visits to those chains weigh heavily on the restaurant industry as a whole.
NPD Group analyst Bonnie Riggs says restaurant operators need to give the middle class more dining options to make up for traffic declines at fast food chains.
Traffic at restaurants where the average check size is between $US10 and $US20 grew just 5% between June 2011 and June 2014, while fine dining traffic (defined as check sizes greater than $US40) grew 11%.
“Although the percentage of consumers identifying themselves with the middle class is shrinking, this group still represents a large segment of the population and shouldn’t be ignored,” Riggs said in a release. “However, offering a good product at a fair price is no longer good enough. To attract them will take a deeper understanding of what they want when dining out.”
Beyond quality, affordable food, the middle class is also seeking exceptional service, atmosphere, and ambience when dining out, she told Business Insider.
The share of households in the middle tier of income earners has fallen from 55% to 45% since the 1970s, according to the New York Times.
And those households in the middle tier haven’t gotten a raise since 1999.
“After adjusting for inflation, U.S. median household income is still 8% lower than it was before the recession, 9% lower than at its peak in 1999, and essentially unchanged since the end of the Reagan administration,” the Times reports.