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Consumers expect to cut restaurant spending

NEW YORK Despite signs that the recession may be ending, restaurant customers say they plan to spend about 20 percent less per meal in 2010 than they did this year, according to a new study.

The study by business consultant AlixPartners LLC surveyed 1,000 consumers, who said they plan to spend an average of $11.49 per meal next year. In a similar survey the company performed nine months ago, respondents reported spending an average of $13.25 per meal.

While spending is expected to decline, weekly restaurant visits are actually up. The study found that 63 percent of those polled had dined out at least weekly over the past 12 months, up from 52 percent in the March survey.

Meanwhile, monthly visits to fine-dining restaurants dropped 36 percent, the survey found.

“While food quality today remains top of mind for the consumer, the core driver for diners continues to be value, value, value,” said Andy Eversbusch, a managing director at AlixPartners. “That determines how often people eat out, and where they eat out.”

Eversbusch also noted that while industry relies heavily on discounting these days, it is unclear whether the strategy “will provide a sustained positive impact.”

This year saw a proliferation of value-focused promotions at restaurant chains, from value menus and $5 meals at fast-food chains to bundled meals and coupons at casual-dining restaurants. However, while discounts may have succeeded in driving some traffic, many restaurants continued to see negative same-store sales as deal-seeking consumers cut spending. Click here for a selection of recent third-quarter results from restaurant companies.

Adam Werner, co-author of the AlixPartners study, said consumers have already “recalibrated their spending expectations based on the now-ubiquitous $5 sandwich and the $10 meal. Restaurants that aren’t marching in the promotions parade are the ones that will be left behind.”

However, the study's other co-author, Adam Fleiss, noted that restaurants must be careful to maintain food quality and healthy margins as they turn to value-focused offers.

“If they are not able to re-engineer their menus to offer exceptional value, they will continue to struggle,” he said. “And if they are not able to manage their execution in a way that keeps their margins healthy, survival will be a challenge.”

Contact Elissa Elan at [email protected].

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