Dining out on a downer

Unfortunately for foodservice operators, relief is still a way off, as latest research from Mintel reveals some 24% of restaurant-goers plan to spend less at restaurants this year than they did in 2010.

"Even with the economy on the mend, consumers are still very cautious about increasing their restaurant spending," says Eric Giandelone, director of foodservice research at Mintel. "The restaurant industry grew 2.1% to reach US$403.5 billion (about R2900 billion) last year, but if restaurant-goers reduce how much they spend when they eat out, or only spend as much as they did last year, restaurants could have a slow recovery ahead of them."

Some buck the trend

However small, 10% do say they plan to spend more at restaurants in 2011, and consumers with the highest household incomes are most likely to make this claim. Still, of restaurant-goers who plan to spend more when they eat out, the most popular destination is a casual dining restaurant, with 67% reporting as much. This is good news for the casual dining sector, since previous Mintel research* found that 31% of diners who visited casual restaurants in 2010 were spending less than they did in 2009.

"This focus on frugality isn't likely to disappear any time soon," adds Giandelone. "For the near term, restaurants will still need to focus on value, such as limited-time offers (LTOs), small portion size options, kids-eat-free promotions, or other creative ideas to increase traffic with value pricing and help consumers feel more confident about spending their dollars at a restaurant instead of a grocery store."

Price may be a major deterrent to increasing restaurant spending, with 63% of restaurant-goers saying it's too expensive to eat out regularly. Though not everyone is cutting back; some plan to stick with the status quo. Of those surveyed, who have visited a restaurant in the past month, 66% say they plan to spend the same amount when dining out this year as they did last year.

*Casual Dining - US - October 2010