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Fine dining comeback to hold steady

Fine dining comeback to hold steady

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So many high rollers chose to trade down or cut back during the recent recession that many fine dining operators struggled to stay afloat. But a pair of new studies—one that analyzes recent dining behavior, another that forecasts future dining activity—indicate the fine dining segment has come most of the way back and is likely stay healthy for the foreseeable future.

Fine dining restaurants experienced double-digit declines during the recession, with the 2008-2009 period being the worst. But NPD Group’s just-released 2013 foodservice market data shows a five percent increase in visits to fine dining restaurants, even though overall numbers for the foodservice industry were flat. That makes three years in a row that fine dining has been ahead of the industry in terms of visits. Keep in mind that while fine dining represents only a small share of total restaurant visits, it accounts for 14 percent of consumer foodservice expenditures. Average checks for 2013 were $28.55 for fine dining, $13.75 for casual dining and $5.32 for quick-service restaurants.

Why this uptick?

“Fine dining restaurant operators are listening and responding to marketplace needs,” says NPD restaurant industry analyst Bonnie Riggs. “There was a time when many of these restaurants were in such high demand that they decided who could visit and what they would pay. The recession hit and there was more supply than demand. Fine dining operators responded by making the changes necessary to appeal to their customer base and their customers have responded.”

But will those customers keep responding? That’s one of the things the American Affluence Research Center’s twice-yearly surveys try to predict. AARC measures and tracks the spending plans of affluent consumers—defined as the top 10 percent of U.S households, i.e., those having a minimum net worth of $800,000—over the next 12 months.

The survey quizzes respondents about their future expenditures on a variety of different products and services, fine dining and casual restaurant dining among them.

Respondents to AARC’s new study of wealthy households indicate that they plan to spend about as much at fine dining restaurants during the next 12 months as they have during the recent past. Seventy-one percent said they will spend the same amount on dining in upscale restaurants, while six percent plan to spend more.

The numbers for casual/family restaurant dining activity were slightly better. Eighty percent of respondents plant to spend about the same amount in the year ahead, and nine percent expect to increase their spending.

Overall, the survey results indicate that fine dining expenditures, at least by well-off consumers, are more likely to be stable than up. Factor in NPD’s numbers that show how fine dining is outpacing other segments and the overall picture is one fine dining restaurant operators can live with. While it’s logical to hope for an increase in free-spending customers, fine dining operators who remember how rough it was during 2008-2009 for this segment can live with predictably flat results for now.

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