Spending

Bluedot’s report offers restaurants insight into consumer consumption behaviors

Inflation and lingering fears of a recession are affecting consumer spending behavior. And as always, the restaurant industry is a great place to take the temperature of what people are willing to spend their discretionary money on, because dining out is certainly not considered a necessity. Despite the Federal Reserve’s efforts to stave off further inflation, the reality is that many are comparing it to 2008, when the United States went through its last recession.

Rising food prices, supply chain issues and labor shortages continue to plague the restaurant industry. “The price of groceries and restaurant meals jumped again in August and are now 13.5% and 8% higher than a year ago, respectively. The overall food index rose 11 .4%, the biggest 12-month jump since May 1979 (Forbes).

So what can restaurants do to maintain profitability? Bluedot’s 7th edition of its State of What Feeds Us research report gives restaurants insight into the latest customer trends to help them address challenges they may be facing.

“They spoke to consumers about their restaurant experiences and what brings them to restaurants. What prevents them from going to the restaurant? What interests them? and it really unveiled a lot that restaurateurs can learn,” noted industry expert Barbara Castiglia, editor at Modern Restaurant Management.

Five Takeaways from The State of What Feeds Us Report

Bluedot’s data collected from its study goes back three years and notes consumer trends in the restaurant industry. The 7th Edition polled 1,631 Americans (18+) to get a sense of what people are and aren’t willing to pay when it comes to dining out during these trying times. Here are the five key takeaways from the study:

1. Coffee chains create competition for QSRs

Coffee chains have been included against Quick Service Restaurants (QSR) for the first time. Sixty percent of respondents said they would visit a coffee chain drive-thru instead of a QSR if the QSR’s drive-thru lane was too long, highlighting the increased competition for clients.

2. 75% of respondents are looking for offers

Use of special offers is on the rise, with respondents noting the methods they used to find discounts (51% restaurant apps, 43% coupons, 30% menu board, 29% media social media, 27% email, 26% restaurant website). Importantly, 44% of Gen Zers (anyone born between 1997 and 2012) find deals on social media.

3. Nearly 7 in 10 consumers use apps and loyalty programs

Driven by the desire to find deals and earn free stuff, consumers are downloading apps with high-income earners preferring apps over any other method of finding discounts. Dinner coupons are the most popular with a 53% response. Lunch comes next and is most popular with Gen Z at 36%. Breakfast and snacks only brought in 11%.

4. Mobile orders are down

The mobile order picking process frustrates many consumers who face long wait times upon arrival to pick up orders whether they are prepared or not. A third of survey participants said they didn’t want to wait longer than four minutes. Other annoyances include preoccupied staff, inaccurate orders, and cold food.

5. Support for sustainable restaurants continues to be popular

75% of consumers are more likely to patronize eco-friendly restaurants and restaurants with clean ingredients; however, only 1 in 3 are willing to pay for it. Additionally, 86% understand what it means to have a plant-based menu and 30% have ordered one.

A multi-faceted approach to maximizing current trends can boost sales

So what insights do these trends offer restaurateurs? “Obviously planning something that brings value, maybe putting together some sort of menu items that you can use that term value that will grab people’s attention. Offer discounts if possible. If there are ways you can find to reduce something that people will feel like they’re getting that value, you’ll make that connection with them,” Castiglia said.

Value creation has become increasingly important, as the study notes that 91% of consumers have noticed price increases. And, at the same time, 77% of respondents said they paid the same price for smaller portions. Add to that the fact that 83% of survey participants are reducing their restaurant visits, restaurateurs simply can’t afford to ignore trends if they want to stay alive.

Curating and menu adjustments can help reduce costs for restaurants. Consistent portions and only cooking what is needed is another way to reduce waste. Additionally, “digging deep into the ingredients used for menu items will be critical to determining profit margins. Identify best and worst performing items and review meal prep costs/time” (Restaurant Technology News). With this information, restaurants can streamline menus and focus on the most popular items with the highest profit margin.

In the same article, the use of technology to streamline operations and create multiple customer touch points is mentioned. Loyalty programs are another way for restaurants to connect and reward customers who frequent their establishment. “Obviously, if people are looking to download apps and loyalty programs because they’re going to find deals and freebies, now’s the time to invest in those and create that environment and make available to meet your guests,” Castiglia said.