From Sarah E. Lockyer of Nation's Restaurant News
: Despite another jump in the national unemployment rate
and conflicting economic indicators released last month, a new survey
shows that consumers' plans to spend at restaurants are only improving
as confidence in the economy grows.
Atlanta-based RBC Capital Markets' September restaurant spending
survey, restaurant spending plans rose 3 percentage points from the
prior survey in May, and 14 percentage points from the same September
survey a year ago. The survey, which is completed by the investment
bank quarterly with ChangeWave Research, taps more than 2,000 consumers.
out over the next 90 days, 16 percent of respondents said they planned
to spend more on dining out, up from the 13 percent in May and just 8
percent in February who responded similarly. A reduced 33 percent of
respondents said they planned to spend less on dining out during the
next 90 days, down from 39 percent in May and 50 percent in February
who answered that way.
"Confidence in the
economy is improving, as those planning to spend more at restaurants
cited better job security and less need to save money," said the report
from RBC restaurant securities analyst Larry Miller. "Value is driving
consumers to eat out more, as are having less time to cook and an
uptick in workers per household."
stand to benefit, according to survey respondents, include Red Lobster,
Chipotle, Olive Garden, Maggiano's Little Italy and Panera Bread.
Concepts that respondents said they would not frequent more often
included Denny's, Golden Corral and Morton's, The Steakhouse.
recession is pushing more people back into the workforce, Miller noted,
meaning certain families have less time to cook at home, a typical
driver of eating out at restaurants. In addition, research showed that
respondents pointed to better job security and less need to save money
as reasons behind increased tendencies to eat out.
the primary reason for increased plans to dine out rests on value. The
surge in dollar menu items, bundled three-course meals or fixed price
menus have helped spur restaurant traffic.
increased value restaurants have been offering has not gone unnoticed;
it's the No. 1 incremental reason for eating out more," Miller noted.
the September survey, consumers said they were using coupons more since
the May survey, had reduced instances of skipping beverages or ordering
less-expensive items, and had reduced their tendencies to eat at less
expensive restaurants — all because of the various value deals being
As consumers begin to dip their toes
back into the spending pool, a focus on value is perhaps the lasting
takeaway from this "great recession," sources say.
consumer's focus on value will remain and signifies a shift in consumer
behavior that must be addressed," the latest industry newsletter from
mid-market investment bank The Cypress Group highlighted. "Concepts
must effectively communicate their value proposition and become ‘top of
mind' when consumers evaluate choices."
Englewood, Colo.-based firm noted that while price value is important,
successful restaurant brands also will look to service, menu quality
and experience as part of the value equation.
example, while Red Lobster currently is promoting its Endless Shrimp
deal for $19.99 in most markets, Chipotle, which raised prices last
year in the midst of the recession's depths, focuses on its quality of
food, convenient online or text ordering, and in-store service.
whether additional price increases might be forthcoming, even as
consumers continue to focus on value, Chipotle's chief financial
officer said during its latest call that the chain could boost prices
"We still think we offer, and our research says [that] we offer, a compelling value to our customers," John Hartung said.
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