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Family dining poised to prosper with value, broad appeal

CHICAGO After years of waning sales and diminished foot traffic, family dining is on the brink of a resurgence, thanks to some aggressive marketing, menu reengineering and an increased focus on providing more value to consumers, according to Technomic.

Astudy released Thursday by the marketing research firm found the segment well positioned for renewed growth, especially in comparison to casual dining. Of 1,500 people surveyed, 58 percent of consumers said family dining provided good value for the money, compared with 32 percent for casual dining; approximately 76 percent said the food at family restaurants was something their kids would eat, compared with 56 percent for casual dining; and 43 percent said family restaurants offered kid-friendly atmospheres, compared with 32 percent for casual dining.

According to Ron Paul, president of Technomic, family dining has managed to weather the recession better than casual dinnerhouses for several reasons, including the segment’s ability to serve more dayparts, offer better quality food at lower price points and provide a kid-friendly atmosphere for value-conscious, family-minded consumers.

Paul pointed to national chains such as Cracker Barrel and IHOP, and regional players such as Ruby’s Diner and Waffle House, as examples of family-dining operators that have been performing well because they are increasingly proactive in giving new alternatives to customers.

“These restaurants are offering broad menus, have attractive price points and a reasonably comfortable environment that is child and family friendly,” he noted. “I think they have awakened to the fact that they have an opportunity here. Casual dining is hurting and they can get some of those customers who are looking for both quality and value.”

Paul added that higher check averages and overexpansion are the main reasons for the casual-dining sector’s woes in during the recession.

“Casual dining got awfully pricey for what it was delivering to consumers,” he said. “It also overbuilt lots of stores. That hasn’t happened in family dining. They haven’t seen the large number of closings like casual and fine dining have. The higher the price point or check average, the poorer the business has become."

Mark Chmiel, chief marketing officer for 1,500-unit Denny’s Corp., agreed.

“We really believe that with the financial crisis that has taken place, the average consumer is recalibrating his or her family budget,” he said. “They’re looking for everyday affordability when going out to eat and casual dining is at the higher end when it comes to check average. What’s happening now with consumers is they’re going to QSR if they want good quality items at a low price point and family dining if they want to sit down for service. They’re going to casual dining for more of a special occasion. Because of the price point, it’s become the odd-man-out in this whole thing.”

Chmiel acknowledged that the importance of menu development has increased within the segment. Earlier this month, Denny’s introduced its new Better Burger, a 6.5-ounce grilled burger served on a toasted sesame bun and topped with melted cheese, shredded lettuce, pickles, tomatoes and sliced red onion. The burger is available in five varieties: Western, double cheese, classic cheese, mushroom Swiss and bacon cheddar, and comes with wavy-cut fries and a beverage. The meal is priced at $6.99.

The chain also introduced several better-for-you options in July. And Chmiel said Denny’s is continuing to upgrade its menu and is looking to add more “cravable” breakfast items during the first quarter of 2010. The items, which would fall into the meat and griddle categories, will be priced between $4.99 and $5.99 each, he said.

Contact Elissa Elan at [email protected].

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