Consumers say they will likely cut back on restaurant visits in 2012, and spend less money on dining out, a new report by restaurant and foodservice consulting firm AlixPartners LLP finds.
Consumers overall expect their restaurant visits to decline by about 3 percent in 2012, according to the report, from 11.7 monthly visits in last year’s second quarter to 11.3 monthly visits this year.
Most consumers said they were cutting back on dining out for financial reasons, but many also named a desire to eat more healthfully. A desire for value and convenience also played heavily into their dining-out decisions.
After a tough 2011 marred by spikes in commodity costs, price competition and the general lack of consumer confidence, restaurant chains saw the dining public split into two categories: the 1 percent, or high-end diners who are spending again; and the 99 percent, who are searching for affordable meals that don’t sacrifice quality.
“The industry most certainly is rebounding, but slowly,” said Adam Werner, managing director and co-leader of the restaurant and foodservice practice for AlixPartners. “Companies are going to have to become more defensive. It’s more of a share game. In order for me to grow, I have to steal from you.”
Key trends for 2012: Value, convenience, health
While quality food remains the No. 1 factor influencing restaurant choice, value, convenience and healthfulness are also key trends for the year ahead, the report said.
Consumers said they plan to pay about 5 percent less in restaurants in 2012 compared with last year, in part because of promotions and dining deals that drive traffic.
The average amount spent per meal is expected to drop to $13.30 this year, compared with $14 last year, the report found.
“Discounting is here to stay,” Werner said, and restaurant chains will continue to use bundled meals to convey value.
Pricing, however, will also become more sophisticated, with many chains using tiered strategies, varying prices by region or based on consumer demographics, and raising prices only on select or non-core items.
Comments
Post a CommentBack to Basics
I completely agree with this. At our restaurant we hardly ever discount, but we add value - a complimentary glass of champagne gives a completely different message to money off and has the same effect. However I must point out, as a restaurant owner, but also as a restaurant business coach that now is the time to get the BASICs in place. It amazes me when I see how many restaurants who are often struggling, or who are certainly not meeting their potential, do not have the really easy to implement, affordable basics in place such as referral programs and comment cards. I understand it's a time /resource issue. Small restaurants are busy just getting through the day, much less to think up and implement ideas. But that's a shame as they aren't really capitalizing on all that hard work. At my coaching business we have put together a very reasonably priced kit with all these basics already done for restaurant owners to just switch out logos and information, print and apply to help them get these basics into place. Check out our Restaurant Marketing Systems and other services. Getting the restaurant marketing basics into place could be the difference of sink or swim for a lot of restaurants out there this year.
Incentives work in moderation
I would agree with the comments below, but add that incentives/ discounts are relevant more than ever. The trick is moderation. No concept should approach the frequency of discounting the pizza industry is famous for -- estimated at 1 offer per dining decision.
However, with potentially 60+ lunch/dinner decisions up for grabs each month there's plenty of room for a smart, moderate approach to discounting. Combine a smart campaign with effective targeting, include the RIGHT offers for quality food/ service and growth happens every time.
Brett Bowden
BeDirect Marketing
Oklahoma City
Discounting won't sustain business long term
A reliance on discounting, even by QSR, always ends up with more and more reliance on promotions to drive business -- business that should be driving itself!
For start-ups, independents and mid sized chains, look more towards developing a strategic long term community-based marketing plan based on some solid brand messages (may need to be reviewed annually).
Tom Kelley
Concept Branding Group
San Diego