The focus on frugality will continue to dampen dining-out trends in 2011 with many consumers still looking for value on restaurant menus, according to a survey by Mintel.
In a survey of 2,000 consumers in October, research firm Mintel found 24 percent plan to spend less at restaurants in 2011 than they did in 2010, while 66 percent plan to spend the same. The survey also found 63 percent of respondents said it’s too expensive to eat out regularly.
“Even with the economy on the mend, consumers are still very cautious about increasing their spending,” said Eric Giandelone, director of foodservice research at Mintel. “The restaurant industry grew 2.1 percent to reach $403.5 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.”
Respondents to the NRN a.m. 2011 Restaurant Operator Survey in December were more optimistic about the prospects of a recovery this year. Of the more than 130 respondents, 70 percent expect their sales to be better this year than in 2010 and about 45 percent expect increased consumer spending. Click here for full results from the survey.
In Mintel’s consumer study, only 10 percent said they plan to spend more at restaurants in 2011.
In what Mintel describes as good news for the casual-dining segment, 67 percent of those who plan to spend more in restaurants this year said their destination of choice would likely be a casual-dining venue.
“This focus on frugality isn’t likely to disappear anytime soon,” Giandelone said. “For the near term, restaurants will still need to focus on value, such as limited-time offers, 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.”
While the report noted that positive economic indicators of late offer a reason for optimism, “the economy has a long way to go before it fully recovers and before restaurant operators feel fully restored from the losses they suffered over the past two years.”
Still, the researchers also offered some rays of hope.
Mintel, for example, has projected that the restaurant industry will experience 3.9 percent growth to reach $419 billion in 2011.
Full-service restaurants are expected to rebound from the anemic 0.2 percent sales growth of 2010 to grow 2.3 percent this year, or 1.9 percent at inflation-adjusted prices.
The limited-service segment — which includes both quick service and fast casual — is expected to grow a more healthy 4.3 percent in sales in 2011, or 2.8 percent when adjusted for inflation, the report said.
“For those consumers who cut out all their dining-out occasions, limited service offers a gentle wade back into eating out for those not quite comfortable or economically confident enough to take the plunge,” Mintel said in its report.
Contact Lisa Jennings at lisa.jenni[email protected].