Restaurant customer migration continues to eat away at top line growth and bottom line profits for chain restaurants. Since 2009 the economic turmoil, malaise, or quagmire has been to blame if one were to listen to earnings conference calls conducted by many major chains.
The truth is consumers are not eating any less today than they did in 2009. They are in fact eating somewhere else. The restaurant industry overall has been stagnating since even before the recession, according to Harry Balzer of The NPD Group. In 2000, the average American ate out 215 times a year. Last year, that number shrank to 192 visits a year as reported by NPD.
Many chain leaders justified, and rationalize why they are not adapting to the consumers shifting preferences quicker, blaming missteps on a slow global recovery, the weather. Of late they are the same ones claiming victory when in fact price increases provided top line growth all the while year over year customer counts were down or continue trending down.
Might it be that the customer has changed? Foodservice Solutions® Grocerant Guru favorite saying is the “consumers are dynamic not static” simple enough, but why. Brands must be dynamic, reposition or risk becoming non-relevant to consumers. Even worse some brands could become extinct.
Think about Sbarro. Last week Sbarro announced they were closing 155 units. We know that mall traffic has been declined for the past five years. This past Christmas it was reported that mall traffic was down 15%. If you are a restaurant on a pad outside a mall how did you fare? If you’re restaurant was in the food court how did you fare? Now after thinking about Sbarro, think Burger Chef. How are you evolving?
Is your restaurant chain still selling the same food in the same way? Maybe you should consider product mix adjustments, brand repositioning, or new products all together. Who are your customers and where else are they eating. Consumers are not eating any less. They are eating somewhere else. The consumer is on the move. Is your brand?
How are consumers evolving? Here are three key’s we think are important:
1. The U.S Census reports that 50% of U.S. adults over the age of 18 are single
2. The Brookings Institute has reported that Americans are moving into cities at a prodigious rate not seen in over a century. Urbanization changes shopping habits –consumers buy fewer items, more and often. Further, these urbanites find hyper-local, smaller footprint retailers convenient and appealing.
3. The Pew Foundation reports that since 1970, every year has set a new record LOW for marriages. Consider how we have changed in the last 50 years. In 1960, nearly 60% of young adults (ages 18-29) were married, compared to only 20% today.
When a chain restaurant brand is not Understandable, not Memorable or not connected Emotionally with consumers today, that’s when you know your brand is more like yesterday than tomorrow. Is your brand evolving with consumers? Does your company, brand, or franchisor need outside eye’s to drive inside profits?
Visit: www.FoodserviceSolutions.us if you are interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization or learn more at Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant