Diners' evolving needsDiners' evolving needs

Fern Glazer

To tap into growth opportunities in 2012, operators need to understand what will influence consumers and drive traffic in the next 12 months.

While gangbuster growth is not in the cards for 2012, restaurant operators who know what consumer trends to tap into still are likely to have a respectable year, according to industry observers.


Customer traffic is expected to grow just 0.07 percent in the next 12 months — an improvement over 2011, but still a modest figure that points to the challenging environment operators continue to face, said Bonnie Riggs, an analyst with The NPD Group, a Port Washington, N.Y.-based research firm.


“We’re forecasting a continued slow recovery,” Riggs said. “Still, there will be pockets of real growth, behaviors supporting traffic that will outpace overall demand.”


To tap into that growth, however, operators need to understand what influences will affect consumer behavior and drive traffic in the next 12 months. Here, Riggs weighs in on five of those influences:



1. Fast casual. The success of the fast-casual segment, which saw a 6-percent increase in traffic in the year ended in October, is proof that consumers respond positively to fresh food and clean, modern decor, Riggs said. 


This has not been lost on operators in other segments, who have realized the need to remodel facilities and upgrade menu offerings in order to drive more traffic. Top chains in all segments have already begun implementing changes inspired by their fast-casual competitors. McDonald’s, which has been upgrading its food and decor with fast-casual attributes for the last few years, recently began touting its farm-to-fork story via an ad campaign showcasing the brand’s fresh and authentic ingredients, and the farmers and ranchers who supply them. Red Lobster recently underwent a rebrand that included TV ads starring real people, a new logo with the tagline “Fresh Fish, Live Lobster,” wood-fired grills in all locations and a remodel of its entire system that featured a New England design aesthetic. 


“We think we’re going to see a lot more of that going on,” Riggs said of the fast-casual-inspired upgrades.


2. Healthful/light foods. French fries and soft drinks have been on the way out for some time now, as more consumers seek healthful or light options when dining out. Though the number of consumers who opt for these foods didn’t grow in 2011, largely because of their higher price points in a down economy, the servings of better-for-you foods did. Compared with 2006, servings of several restaurant foods consumers deem more healthful have grown, including cereals, cold-cut combo sandwiches, chicken/tuna salad sandwiches, veggie sandwiches, turkey/turkey clubs, yogurts, non-fried fish/shellfish and vegetarian meals. 


Many brands are capitalizing on better-for-you fare, including Subway, which offers a “Fresh Fit” menu and made-to-order breakfast sandwiches. In a collaboration with the editors of Men’s Health magazine and the “Eat this, Not That!” brand, Carl’s Jr. in December expanded its already popular line of charbroiled turkey burgers to include the new Santa Fe Turkey Burger. The original Turkey Burger, Teriyaki Turkey Burger and the Guacamole Turkey Burger also remain on the menu.


3. Kids’ meals. Pint-sized people may be small, but their meals are likely to see big changes in 2012. With continuing pressure from advocacy groups and lawmakers to make kids’ meals more nutritious, NPD projects kids’ meals will look a lot different in the coming years as operators work around concerns and restrictions. Major chains already adjusted their offerings several years ago, allowing consumers to swap soft drinks for low-fat milk and French fries for apple slices.


Marketing to children has also come under fire. In December a new law in San Francisco went into effect, banning toys from kids’ meals that don’t meet certain nutritional standards. But instead of changing its food to meet nutritional standards or eliminating the toys that come with Happy Meals, McDonald’s franchisees in the San Francisco area began offering their Happy Meal toys for an additional 10 cents. The chain donates the money to its Ronald McDonald House charity. 


“What’s started in San Francisco is going to move around,” said Riggs. “I think we’re going to see a lot of innovation in kids’ meals.”


4. Beverages. With servings of traditional drinks on the decline and nontraditional drinks on the rise, beverage innovation will be a big influence on consumer habits in 2012, Riggs said. A look at the top-growing beverages in 2011 reveals that consumers are no longer willing to part with a few bucks for a drink they can easily get at a grocery store or make at home. Among the top-growing beverages last year were iced slushies, coffee, espresso, cappuccino, lattes and iced tea. 


Among those already mixing up innovative beverage options are restaurants as diverse as family-dining giant IHOP, which in December added French Vanilla and Swiss Mocha coffees to its beverage menu for the holidays, to Danny Meyer’s The Modern at the Museum of Modern Art in New York, which last year expanded its menu of special soft drinks made from locally sourced artisanal syrups.


5. Retail. As sales of tobacco, beer and gas have declined, convenience stores have increasingly turned their attention to prepared foods — and not just hot dogs and microwavable burritos, but made-to-order sandwiches, rotisserie chicken, side dishes and more. Consumers have been eating it up. In the year ended in October, retail traffic increased 3 percent. 


“Retail growth in 2012 is a competitive threat, especially to restaurant carry-out, drive-thru and delivery offerings,” said Riggs. 


Among the C-stores taking direct aim at its restaurant competitors’ share of grab-n-go fare is Altoona, Pa.-based Sheetz. The chain of exceptionally large C-stores — some as big as 5,000 square feet — sells groceries, fountain drinks and a continually expanding menu of prepared and made-to-order foods, including fries, wings, hot and cold deli sandwiches, burritos and breakfast foods, as well as cigarettes and discounted gas.


Despite the challenging economy, the privately held company told Nation’s Restaurant News that sales at a typical Sheetz store rose more than 7 percent in the fiscal year ended in September 2009. In November, Forbes Magazine ranked the company the 58th-largest privately held company in the United States, up from 79th in 2010.

Nation’s Restaurant News has an exclusive agreement to obtain the NPD Group data and research findings that appear on the Consumer Trends page.