Family-dining chains are well-positioned to take advantage of rising consumer confidence with their diverse menus, flexible price points and family-friendly atmospheres, according to new research from consulting firm Technomic Inc.
Consumers already associate the family segment with value, Technomic found, as 68 percent of customers surveyed said they would be highly like to visit a family-dining restaurant when they want an affordable, sit-down meal, citing a value proposition better than those at other full-service concepts.
“Family-style restaurant operators may want to tout this strength and leverage it in their marketing message to compete with limited-service restaurants and appeal to consumers who have cut back on casual-dining concepts,” said Joe Pawlak, Technomic’s vice president. “Keys for success in this segment will be emphasizing affordable prices, service, and ambiance, targeting selective promotions at certain consumer groups, and relaying a strong perception of value.”
Denny’s has worked to emphasize its value over the past few years, not only with two free Gland Slam Breakfast giveaways tied to the past two Super Bowls, but also more recently with its $2 $4 $6 $8 Value Menu, introduced in April. That 16-item menu offers choices at various price points all day, including late night, where the 1,500-unit chain has made inroads with its All Nighter menu.
Denny’s also recently announced a partnership with the American Association of Retired Persons, in which AARP members are eligible for discounts at Denny’s restaurants.
Driving traffic in such ways could yield long-term benefits, given family dining’s relatively high repeat business, Technomic said. The firm’s family-dining report found that 73 percent of consumers surveyed said they visit a family-dining restaurant at least once a month, and 38 percent said they stop in once a week.
Often, those visits are from parties with children, putting a premium not only on child-friendly atmospheres but on having a broad menu with popular and healthful options as well. More than two-thirds of consumers, or 68 percent, said they would be likely or extremely likely to choose a family-dining restaurant when dining with children, Technomic found, and 52 percent of those surveyed said the availability of healthful food was important when dining at family restaurants.
To meet both those demands, IHOP, the 1,456-unit pancake specialist owned by DineEquity Inc., said it will roll out a revamped kids' menu in September under a “simple and fit” banner. Items on that menu will range between 400 and 600 calories and are meant to be fun for children, like the Create-a-Face Pancake, which allows children to decorate their pancakes with yogurt and fresh fruit pieces.
Technomic reiterated the importance of a friendly, clean atmosphere for family dining by pointing out that the vast majority of the segment’s revenues come from the dining room. Takeout and catering still account for a very small share of family-dining sales, it said.
While family-dining chains appear poised to benefit from an economic recovery, many have struggled to drive sales so far this year. Denny's, IHOP, Marie Callender's and Perkins all reported negative same-store sales for the first quarter of 2010.
Contact Mark Brandau at [email protected].