NRN presents Consumer Picks — a comprehensive look at customer preference and restaurant brand strength. This annual special report is produced with WD Partners.
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Restaurants have questioned and studied for years the impacts the Millennial age group will have on their businesses — and the answers have arrived.
In the fourth annual Consumer Picks survey from Nation’s Restaurant News and WD Partners, the rising importance of peer or social reviews, best tied to survey attributes Likely to Recommend and Likely to Return, showcase the dominant nature of sharing among Millennials.
• Winning Brands
• Demographic trends by segment
• In-N-Out again leads Limited Service
• Cheesecake Factory continues to lead Casual Dining
• Original Pancake House leads Family Dining
• Ruth's Chris Steak House leads Fine Dining
With the bulk of the estimated 90 million people born between 1980 and 2000 now in their 20s and 30s, Millennials are dining out in droves, loudly voicing their desires and rewarding brands that listen to their preferences. Three out of the four top-performing brands in their respective Consumer Picks restaurant industry segments — In-N-Out Burger in Limited Service, The Original Pancake House in Family Dining and Ruth’s Chris Steak House in Fine Dining — were buoyed by high scores in many attributes, but most importantly in Likely to Recommend. Many of the highest-ranking brands within the report’s subsegments, like Limited-Service Beverage/Snack or Casual-Dining Italian/Pizza, also scored high in Likely to Recommend.
“[The results are] tied to the increasing consumer power of the Millennials, where two-thirds of Millennials will probably ask friends for their opinions before going to a restaurant,” said Dennis Lombardi, executive vice president, foodservice strategies at WD Partners. The Dublin, Ohio-based consulting firm oversees the Consumer Picks survey.
Combine this Millennial need to seek out opinions with the dominance of social media — research firm eMarketer estimates that two-thirds of U.S. Internet users, or 163.5 million people, were part of social media networks by the end of 2013 — and that’s a lot of sharing. Restaurants need to be sure they are listening.
As Millennials make more and more restaurant visits and share their opinions on social media, restaurant brand scores for Likely to Recommend and Likely to Return within the Consumer Picks survey will take on even more importance, Lombardi said.
See full segment rankings and brand scores:
“Likely to Recommend and Likely to Return are the best ways to tell us their impressions,” he said. “Those scores are an aggregation of emotions and feelings.”
The 2014 Consumer Picks report includes survey results for 162 restaurant brands representing four segments: Limited Service, Casual Dining, Family Dining and Fine Dining. The survey was fielded in January, and the results reflect more than 44,000 consumer attitudes on 10 attributes: Food Quality, Value, Cleanliness, Service, Menu Variety, Reputation, Atmosphere, Craveability, Likely to Recommend and Likely to Return.
Beyond the growing importance of recommendations, the survey also revealed that Millennials placed more value than the older baby boomer generation and seniors on Craveability, no matter the restaurant segment.
Those preferences led to a notable upset within the Family-Dining segment, where The Original Pancake House this year dethroned longtime top-scorer Cracker Barrel Old Country Store. Original Pancake House garnered the highest scores for seven of the 10 attributes in that segment, pushing it from its third-place position in 2013 to No. 1 in 2014.
One of the attributes in which it excelled was Craveability, where Original Pancake House was nearly 16 percentage points higher than runner-up Cracker Barrel. Original Pancake House also won the highest score for Likely to Recommend, coming in 5.8 percentage points higher than runner-up Cracker Barrel.
Jon Liss, general counsel and corporate for Portland, Ore.-based Original Pancake House, noted that social media had helped to raise the profile of the 121-unit chain, which operates as a network of franchises.
“There’s a viral quorum, if you want to put it that way,” Liss said. “In the past two to three years we’ve broken through to get a national reputation. There are more franchisees involving themselves in social media, and that might have some impact.”
Although Cracker Barrel edged ahead of Original Pancake House in its score for Atmosphere — another attribute Millennials value more within the Family-Dining segment than baby boomers and seniors do — and Menu Variety, it was not able to maintain its hold on the No. 1 spot for the fourth year in a row.
While Millennials are throwing their weight around and the increased importance of the Likely to Recommend attribute is shifting results, the importance of the Food Quality, Cleanliness, Value and Service attributes was not diminished. Success in those attributes remained crucial to all consumers across all of the segments. The next most important attribute — one that differs from segment to segment and we call the ‘X factor’ — includes Craveability for Limited Service, Atmosphere for Casual Dining and Menu Variety for Family Dining.
Brands that win over guests with the X factor tend to win overall consumer preference. For more insights into brand strengths and the demographic trends driving dining-out choices, view the full special report, including the full methodology and breakdown from WD Partners.