As 2013 comes to a close, market research firm Sandelman & Associates hits a milestone of providing market-level consumer insights to the restaurant industry for 25 years. In celebration, the firm takes an exclusive look at the past, present and future of foodservice for Nation's Restaurant News.
Here are 25 insights from 25 years:
1. It’s all about perception. Speed and health ratings at fast-casual chains often exceed those of their traditional quick-service counterparts even though, in reality, it’s usually fewer seconds — and sometimes fewer calories — at quick-service restaurants.
2. Don’t mess with McDonald’s. As Dunkin’ Donuts and Starbucks began to eat into McDonald’s breakfast share, Goliath fought back with a line of premium coffee drinks and regular coffee, badly undercutting the competition on price, speed and even convenience.
3. If you want to launch a quick-service chain, consider Texas. Year after year, the heaviest QSR users are in McAllen, San Antonio, Dallas, El Paso, Houston — pick one. Indeed, several Texas markets are great pizza markets.
4. Gen X is the most demanding of QSR chains.
5. It’s time for casual-dining chains to focus on a broader target. In 2006, 40 percent of consumers qualified as heavy casual dining users and contributed more than 75 percent of all occasions. Today, fewer than 20 percent are heavy users and they account for less than 40 percent of occasions.
6. Call us prognosticators. Our casual- and family-dining tracking study, “Casual-Track,” uncovered a dip in customer satisfaction across several tracked chains reported in our fall 2007 “Tracks”newsletter, predicting a likely decline in the category before the recession hit.
7. There’s a battle for a “pizza-the-pie.” Pizza share of all occasions spiked in 2006-2007, bottomed out in 2009 and is rebounding. Monitored chains and local independents have recently battled to a draw. But in markets like Buffalo, Albany and Hartford, independent pizza restaurants serve up more than three in four pizza occasions.
8. The 2000's were a blur. Last decade there was a blurring of the lines between QSR subsegments. Chain types now compete with chains of all stripes, not just with chains of the same type (e.g. burger). Even Chipotle users grant greater share of their visits to McDonald’s than to Chipotle.
9. The consumer is schizophrenic. Despite their desire for a greater variety of healthful food choices, about six in 10 casual dining users, especially women, say they will continue to order the foods they crave.
10. Perception is — or isn’t — reality. Customers think Burger King’s Whopper and Starbucks Grande Frappuccino are much higher in calories than they are, for example.
11. A better-burger segment shakeout is coming. Consumers appreciate the better experience, but they question the value.
12. Loyalties are strained. In the late 1990s, Washington, D.C.’s QSR users visited an average of five chains in the past three months; in 2013 they visited seven chains on average.
13. Breakfast has always been huge in the South. Now, the Northeast is clearly a hotbed of a.m. occasions.
14. Chain restaurant users are changing the way they get restaurant information. Over the past 10 years the internet is replacing newspapers and direct mail, much more so in casual dining. But TV and in-restaurant materials are as important as ever.
15. The recession really hurt Hispanic QSR participation. Between 2005 and 2009, category participation contracted from 96 percent to 78 percent. Ouch.
16. Heavy QSR users may be older than you think. Young males still account for a large chunk of users and occasions, but today, 35-to-44-year-olds account for a lot of occasions, and their drivers are different.
17. We’re eco-friendly, too. Eighty-five percent of QSR users believed in recycling in 2000. Sandelman responded to the call soon thereafter, replacing its binders of crosstabs with an online, multidimensional cube client interface.
18. Serving food kids like is the biggest driver to kid appeal. Some chains conceded the kids market to McDonald’s in the 1990s, feeling they can’t compete with huge marketing budgets. Many chains are chosen for family meals by simply promoting kid-friendly food.
19. Which comes first, eat-in or high ratings? Chains with higher than average eat-in tend to have higher ratings. Consumers elect to dine in at places they feel better about.
20. Diners don’t want to admit they like McDonald’s, but they like it more of late. The brand has by far the highest usage, but ratings tend to be weak. The chain is driving growth by improving perceptions.
21. Value perception is growing.When food, service and atmosphere are fairly priced in the consumer’s mind then they believe they’re getting a good value. In 1999, QSR users in Atlanta spent $4.13 on average and today spend $5.68. Then, 65 percent of them were satisfied with “value for the money”; today, 74 percent are satisfied. Good work!
22. Encourage retrial among Hispanic women. Males historically are heavier QSR users than females, especially among unacculturated Hispanics. In 2007, the Hispanic gender gap was especially large, but chains have worked to narrow the gap since then.
23. C-stores are taking a big gulp out of QSR. C-stores are aggressive competitors. In the mid-Atlantic, Sheetz plays a major role, now serving as many as one in 20 QSR lunch occasions in its strongest markets.
24. Health matters. Health has been key in Subway’s phenomenal growth and success. Only six in 10 QSR users considered healthy food when choosing a chain in 2000, while almost seven in 10 did in 2010.
25. Every market is different. Competition and consumers vary by market. A proliferation of regional and local brands in the 1990s prompted Sandelman & Assoc. to add some growing chains to its Quick-Track study. A boon: These developments helped the study grow from one market to 100 markets monitored today.
Sandelman & Assoc. is a San Clemente, Calif.-based independent research company that provides consumer insights to chain restaurants.