Panelists say operators cannot afford to target one particular demographic group at the expense of others
This is part of Nation Restaurant News' special coverage of the 2012 MUFSO conference, taking place Sept. 30-Oct. 2 at the Hilton Anatole Hotel in Dallas. Follow coverage of the event on NRN.com's ‘At the Show’ section, read onsite blogs from NRN editors at Reporter’s Notebook, and Tweet with us using #MUFSO.
Consumers may be demographically more fragmented than ever before, but operators cannot afford to target one particular group at the expense of others, top observers of restaurant-related consumer behavior told MUFSO attendees Sunday.
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A panel of experts participating in the Consumer Trends & Implications for Foodservice seminar addressed a range of social, demographical and psychological influences driving consumer behavior in today’s marketplace.
“Today’s consumer is not easy to decipher,” said Nation’s Restaurant News executive editor Robin Lee Allen, the panel’s moderator. “The consumer is more fragmented, more demanding, more connected to what others are saying and more aware of their choices.”
One key demographic trend that is impacting the marketplace is that consumers between the ages of 50 and 64 are emerging as a larger sales component of the foodservice business. “Most chains are targeting younger demographics,” said Warren Solochek, vice president of Client Development for The NPD Group. “But that’s a mistake. Since the Recession, [baby boomers have] become heavier users of restaurants on a per capita basis than younger people.”
That group accounted for 21 billion restaurant visits last year and $156 billion in restaurant spending, he said. Moreover, contrary to what was previously believed, they are patronizing quick-service operations more frequently than full-service restaurants.
“Restaurateurs are going to have to deal with those consumers,” Solochek said.
However, operators these days cannot afford to target one demographic group over another. Any restaurant that focuses on a specific demographic is limiting its appeal, said Darren Tristano, executive vice president of Technomic Inc. “You want to appeal to the broadest range of demographic groups,” he said. “You don’t want to alienate anyone.”
Dennis Lombardi, executive vice president of Foodservice Strategies for WD Partners, also noted that operators must be able to grow by appealing to a diverse range of consumers. He said that Asians now are the largest immigrant group coming into the United States, and they have the highest household income as well. At the same time, one in four children under one year old in this country is Hispanic.
Another key social trend impacting restaurateurs and their customers is the rapid rise of digital communications and the Internet. “Digital changes everything,” Lombardi. “It defines your brand image and allows independents and small chains to compete more effectively with the mega-chains.
“It allows for three-way communications: You to the customer; the customer to you; and most critically, your customer to the potential customer,” he said.
Consumers’ growing interest in health-centric fare — fueled in part by lawmakers continuing attempts to regulate Americans’ dietary habits — is another trend that is contributing to the further fragmentation of the dining-out population. However, the panelists warned operators not to sacrifice “indulgent” menu items for the sake of more healthful dishes.
“Is ‘indulgent’ going away?” Tristano asked. “Probably not. The balance will continue to be there, and it’s important how you market [the menu] to the consumer.”
Solochek noted that Americans believe they can manage their diets better at home, and will continue to indulge at restaurant. “But you’ll see a balance,” he said.
The panelists also addressed the continuing trend of discounting throughout the foodservice industry. “Discounting is only one tactic in the toolbox,” Lombardi said. “When you rely on it too much, it can get you in trouble.”
Tristano added, “The more discounting you do, the harder it is to get full price again,” noting that the successful chains build value without discounting.
Find more MUFSO 2012 coverage online at NRN's sister publications, Restaurant Hospitality and Food Management.
Contact Paul Frumkin at p.frumkin@nrn.com
Follow him on Twitter: @NRNPaul