Skip navigation
Restaurant goers are trading up from quickservice to fullservice eateries because they value the quality of the experience
<p>Restaurant goers are trading up from quick-service to full-service eateries because they value the quality of the experience.</p>

Foodservice growth has other sectors envious

&bull; See more Consumer Trends articles

Although it’s notoriously difficult to make money in the restaurant business, the overall industry has put up solid numbers as of late. Now companies in the retail sector are wondering why they aren’t doing as well.

Global business advisory firm AlixPartners has come up with some data that shows what’s working for restaurants and suggests steps retailers can take to make it work for them. If sales at your restaurant are growing slower than the industry norm, you may wish to heed some of this advice.

Here’s what AlixPartners says retailers should do to put up better sales numbers for the rest of 2016.

Provide a higher-quality experience. Dining occasions won’t be going up this year, AlixPartners says. But the amount of money spent per average meal will climb. That’s because U.S. consumers will be upgrading from quick-service restaurants to fast casual and fine dining. Why? Because it’s a better overall experience—a factor of high value, particularly to millennials.

The firm’s research found that consumers’ “expected average spend per meal” in 2016 is 1.9 percent higher compared to the previous year. In 2015, the expected spend was minus 6.2 percent; in 2014, it was minus 9.1 percent in 2014; and minus 4.7 percent in 2013.

The lesson for retailers: Customers are ready to open their wallets.

“We believe this willingness to trade up at the dining table could translate into a similar willingness to pay for higher quality experiences—and yes, even products—at retail stores as well,” AlixPartners suggests. “Therefore, as consumer sentiment ratchets back up toward pre-recession levels, retailers should consider reinvesting in product quality, differentiation, experiences and branding.”

Perceived value is the key. Restaurant customers might be quality conscious, but they still expect value when they dine. This factor is making a big jump in importance from 2015 (28 percent of customers said value was an important criterion then) to 2016 (38 percent cite it as a key now). In particular, bundled offerings matter more than “large portion size for the price” or “having the lowest price.”

Quality of ingredients for the price is the most important factor, specified by 68 percent of survey respondents and unchanged year over year. 

Embrace delivery. The numbers say you should make this trend your friend. The weekly usage of delivery for those seeking restaurant meals was 16 percent in 2010 and has risen to 28 percent in 2015.

“Customers’ taste for convenience presents an opportunity for those retailers that optimize their omnichannel fulfillment,” advises AlixParteners. In the restaurant world, “omnichannel” means providing eat-in, take-out and delivery. “Retailers can also learn from restaurant operators as they look to partner with third-party technology-enabled rapid-delivery services.”

Play to your menu’s strengths. Tread lightly when it’s time to revamp your food offerings. The numbers show that nearly eight out of 10 patrons stick with what they know when ordering off restaurant menus. While only seven percent told AlixPartners they always order the same menu item, a whopping 72 percent more said they generally order the same menu items, although they will occasionally try new ones. Only 17 percent said they always try special and/or new item when they visit a restaurant, Just four percent said they never order the same menu items.

The lesson here is that customers aren’t just loyal to specific restaurant brands; they’re loyal to specific menu items, too. The strategic implication for retailers: “When seasonal and fashion items often are the focus of the merchandise planning cycle, the core assortment can be lost in the shuffle,” AlixPartners cautions. “High-level execution of core merchandise can help to ensure loyalty among the customer base.”

Put more simply, “why not bet on a winner?” That’s advice restaurant operators can also take to heart.

Contact Bob Krummert: [email protected]

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.