The Great Recession officially has been over since June 2009, but the effects of that downturn and the slow economic recovery have altered the dining-out habits of consumers — even affluent, optimistic ones — for years to come, The NPD Group said.
The market research firm’s recently released report, “The Changing Consumer Mind-set: What it Means to the Restaurant Industry,” found that following the recession that began in 2007, restaurant customers now are divided into two groups: those who can spend freely and a much greater number of those who cannot.
The NPD Group’s study found that 76 percent of survey respondents qualify as cautious, controlled spenders who say they still are visiting fewer restaurants, trading down from more expensive operations and foodservice segments, and ordering fewer items at each meal. These consumers told NPD researchers that they would be less restrictive with their restaurant spending when the economy improves, but they don’t think that will happen any time soon.
On the other hand, 24 percent of participants report being significantly less affected by the recession and have cut back less on their dining out, the study found. Yet, while respondents in this group did not pare back total restaurant visits as much as the controlled spenders did, they have traded down from pricier restaurant segments since 2007, NPD reported.
“There is considerable disparity between the views of optimists and controlled spenders regarding enticement to visit restaurants more often,” said Bonnie Riggs, NPD’s restaurant industry analyst and the author of the report. “Optimists place much more importance on service and a relaxing atmosphere than controlled spenders, who are more concerned with price and value.”
Restaurant brands across several segments seem to be acknowledging the presence of the two mind-sets. Aggressive discounting has taken the form of value menus in quick-service — bundled dinners priced around $20 and express-lunch offers in the casual dining sector, and $10 large-pizza offers and similar deals in the pizza category.
NPD found that controlled spenders span all demographic groups but skew toward the unemployed, less-affluent households and retirees. Optimists also could be found in every demographic group but were more likely to be employed and from a more affluent household.
NPD’s CREST service had found a slow recovery taking place in the foodservice industry, as total industry traffic remained flat for the 12 months ended in February 2011, compared with the 3-percent decline in the year-earlier period. The research firm’s “A Look into the Future of Foodservice” report forecasts industry growth of less than 1 percent a year through 2019.
“Recovery and growth for the restaurant industry will mean understanding the shift in consumer behavior and realigning strategies with what may be the new normal,” Riggs said. “Rather than age largely defining frequency and type of restaurant visited, lingering effects of prolonged unemployment and loss of wealth by many will carry forward in years to come, regardless of age.”
Contact Mark Brandau at mark.brandau@penton.com.


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I know from working with our clients no one likes to give away food... But a lot of them have gone the route of social media and group coupons to generate new revenue... Some have found great success using Foursquare, others Social Living... I certainly see the value in exploring social media to reach new diners in small controlled efforts... But as we've all heard, there are risks when it's not done right...
Jeff Brooks
jeff@digitalindustri.es
http://digitalindustri.es
Great point Jeff -
The marketing landscape HAS drastically changed within the past 3 years and is continuing to evolve at the speed of light. Many consumers seem more responsive to social media marketing strategies which require a "soft sell/relationship building" process. This type of marketing takes more time to generate a sale when compared to deep discounting. With restaurant diners taking a more conservative approach towards spending, some restaurants simply don't have the time (financially) to invest in a strategy of growing relationships with their customers. Attempting to combat declining customer foot traffic as well as an ever increasing consumer demand for a big "deal of the day", these restaurants feel they have no other option than to "give away the house". This strategy will only lead to the erosion of what tiny profits these restaurants have left.
That being said, I truly feel that the next 2 years will be an all-you-can-eat feeding frenzy for group-based couponing companies. Sadly, as those group-based coupon company's profits grow, the small restaurant's who rely on this type of marketing...will be chewed up and spit out.
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