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As demographics shift, keeping up with customer demands is essential

As demographics shift, keeping up with customer demands is essential

The slowed economy is not all restaurateurs are battling as they work to bring more guests through their doors.

In the past decade, an aging population, more favorable retail prices for food and a growing desire among consumers to stay home have all conspired to eat into restaurant sales — and those factors are not going away.

A new report from The NPD Group called “A Look Into the Future of Foodservice” predicts that the industry will grow less than 1 percent a year over the next decade, not even keeping pace with population growth, which is forecasted to be about 1 percent.

But while the forecast is bleak, the future is not necessarily doomed, said NPD analyst Bonnie Riggs. The onus is on restaurant operators to better understand consumer desires and better market how their restaurant’s experience can address those desires.

“I don’t think as an industry we have done a good job of touting the benefits of the restaurant,” Riggs said.

Not a pretty picture

The inability to appeal to consumers’ needs has hampered the industry’s growth, according to Port Washington, N.Y.-based NPD. While the number of consumer visits to restaurants went from 59 billion in 2004 to 60 billion in 2009, it is expected to slow considerably in coming years. By 2019 NPD projects the number of restaurant visits will grow only to 64 billion.

Furthermore, the number of annual restaurant visits per capita has been on the decline in the past several years, falling from 206 visits in 2004 to 197 visits by 2009, a 2-percent decline. NPD forecasts that by 2019 the number of visits per capita will decline further, to 190, if operators don’t take action to change consumers’ eating-out habits.

“It’s a buyer’s market for the restaurant industry,” Riggs said.

In the race for market share, operators need a better understanding of consumers’ expectations when they head out for a meal. To that end, NPD recently surveyed diners about the benefits they were looking for when visiting various types of restaurants.

Not surprisingly, tasty food and good value topped the list of benefits sought. However, an enjoyable experience and time with family and friends also ranked high in nearly all segments.

When it comes to quick-
service restaurants, more than half of diners surveyed said they were looking to escape cooking as well as for good value, speed and an inexpensive meal. Meanwhile, when eating at family-dining restaurants, more than 50 percent of respondents said they were in search of tasty food and a good value for the money, while more than 40 percent said they were happy not to cook or clean up after a meal and in search of an enjoyable experience with loved ones.

Similarly, at casual-dining restaurants more than 50 percent of diners surveyed said they were seeking tasty food, a good value for the money, no cooking and no cleaning. In addition, more than 40 percent said they were in search of an enjoyable experience with family and friends. 

“Consumers just keep wanting more and more for what they pay,” Riggs said. “It’s not just about food. [Operators need to] make the experience equal the price that’s being paid.”

In addition to providing and touting the benefits that consumers desire, NPD said that convenience and service are key to getting diners out of their home kitchens and into restaurants.

“It starts with good-tasting food, but we need improved service,” Riggs said.

Bang for the buck

Given consumers’ continuing shortage of time and money, restaurants are not only competing with their peers but with other entertainment options as well. To convince consumers to come out and spend, operators in all segments are introducing innovative programs, events, entertainment options and more. Here’s a sampling:

Getting into the spirits. Whether its adding wine and beer to the menu or hosting alcoholic-beverage events, more operators are hoping that a little alcohol will get consumers back into the spirit of eating and drinking out again. Among the biggest players doing so is Starbucks. When the coffee giant’s newly renovated location at Olive Way in Seattle reopens in the fall, it will offer wine and beer as well as new premium foods. It will also feature a new environmentally friendly exterior and interior, decor featuring reclaimed and local materials, and work by local artists.

“We’re always working to enhance the Starbucks experience, and innovation — from our beverages and food to the atmosphere and design of our stores and our interaction with customers — is a way of life for us,” a Starbucks spokeswoman said of the changes.

Adding some live aid. ShowDogs, a 60-seat gourmet-sausage restaurant in San Francisco, is among a number of unlikely operators trying to harness the power of adding live entertainment to enhance customers’ dining experience. Opened in July 2009 in a still-developing theater district, ShowDogs has been doing well at lunch and dinner, but not much after dark. To drive traffic after sundown, the ShowDogs team decided to build a stage and offer live music.

“It’s all about offering more things to more people, but staying within our vision,” said ShowDogs general manager Seth Carter. “Our food is local and organic, so we’re going to stick with that with our music — Bay Area artists.”

So far the strategy is working, Carter said. “It’s taking a little time for people to recognize us as a place for music, [but] it’s working,” he said. 

Driving new business — literally. As an added service, high-end restaurants have long made it a practice to offer valet parking or call customers a taxi. To up the ante on service and ensure no excuses for not coming out, in late 2008 Fleming’s Prime Steakhouse & Wine Bar in Boston started providing a Mercedes Crossover courtesy car to its diners. The complimentary car service picks diners up anywhere in the city for dinner, drives them to the theater, a concert, a game at Fenway Park or any other post-meal event. It also will take them home. Though Fleming’s doesn’t have any hard stats to support the success of the program, it does possess a stack of praiseworthy letters written by satisfied customers, according to a spokeswoman for the steakhouse.

Cooking up customers. For many restaurants, one-off culinary events have long been on the menu. But when the recession hit, BreadBar, a bakery bistro with locations in Culver City and West Hollywood, Calif., decided it would focus on growing its event offerings to bring in more customers. Launched in June 2009, one of BreadBar’s first multipart events is the Hatchi Guest Chef Series, one-night small-plate dinners featuring big name chefs such as Michael Voltaggio and Marcel Vigneron. The series has been so popular — it often sells out — that it spawned a spinoff last May called the Hatchi Mix, featuring high-profile guest mixologists. The bakery’s latest offering is In the Making, monthly cooking workshops for food enthusiasts led by renowned gastronomic experts.

“The events are meant to excite the public ... this place is not just a restaurant,” said Lorena Tomb Reed, BreadBar general manager. “We wanted to build more of a relationship with our customer base. [The events] allowed us to build a lot of loyalty with our customers.”

To lure customers 
back into dining rooms:

Promote convenience

  • Promote value 
and freshness

  • Offer dishes that 
can’t be made at home

  • Better understand 
how guests view 

  • Tout the service 

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