After examining the fast-casual and casual-dining restaurant segments, the Happy Customer Index is now turning its attention to fine dining, an interesting category at this moment as we continue to stave off a recession and as the consumer remains relatively resilient despite an uncertain macroeconomic backdrop.
Those uncertainties paint a complicated picture for this category in particular. Recent research from Deloitte finds that restaurant spending has returned to pre-pandemic levels and that higher quality products are less of a driver than value options, for instance. That said, during times of economic pressures, consumers tend to engage in emotional self-care, and oftentimes that means a premium meal — to the benefit of fine-dining concepts. In fact, the fine-dining category is performing better against customer satisfaction scores than it was pre-pandemic, according to proprietary data from Merchant Centric.
This data is pulled from millions of ratings, reviews, and comments across sites from Google, TripAdvisor and others. For this index specifically, we have taken a deeper look at food, quality, staff demeanor, staff dedication, timeliness, order accuracy, price/value and loyalty/referral, to determine the strongest fine-dining brands related to these themes.
Merchant Centric calls this measure a brand’s Theme Performance Score (TPS). If the TPS for a brand on a theme is higher than one, it indicates that guests mention the brand positively more often than negatively; for instance, a score of 3.5 indicates that guests mentioned that theme positively 3.5 times more than it was mentioned negatively. Conversely, a score of 0.5 indicates the theme is mentioned positively half as much as it is negatively.
The fine-dining category already has an advantage in customer satisfaction levels, as service is at its very core. Consider the average fine-dining concept scores a 4.3 out of 5 stars, versus 4.08 for casual dining; 3.63 for fast casual; and 3.55 for quick-service concepts. Drill down even deeper, and it shows the leaders in this category are answering consumers’ call for premium experiences.
“They are satisfying guests at a higher rating this past 12 months than the previous 12 months, and even better than their all-time ratings,” said Adam Leff, cofounder and chief strategy officer of Merchant Centric. “The leaders within the fine-dining segment are performing remarkably better than the other brands.”
Leaders are scoring especially high on food, getting more than six times the compliments as complaints, while staff performance for demeanor and dedication are also clear differentiators for this group, which also drives high scores for loyalty and referral.
That’s not to say the others are dwindling, however. The straddlers are performing at an average of 4.3 for the past 12 months, which is consistent with the previous 12 months and all-time ratings. Straddlers have also scored better on price/value metrics compared to the leaders, illustrating that price/value is not quite as important for fine dining customers as food and staff demeanor.
The chasers, however, are flat for the past 12 months, but down almost 10 basis points from their all-time ratings.
“They’re not satisfying guests as they used to do historically,” Leff said.
Typically, we break down categories by emerging brands (20 locations or fewer) and established brands (more than 20), but fine dining is anomalous in that there are few concepts with deep footprints. So, let’s look at the 25 concepts that fit the fine-dining category and how they ranked in terms of leaders (4.6 rating and above), straddlers (4.30 rating and above) and chasers (all others). The measurement period is May 2022 through April 2023.
Contact Alicia Kelso at [email protected]