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Client Project:
copy (excerpts) Trend Overview - Market Landscape The American consumer is just as busy as ever, and the foodservice industry will continue to benefit from their customers' hectic lives. Two-working-parent and single-parent households mean less time to prepare home-cooked meals, and even stay-at-home parents often find juggling their kids' activities and running errands as time-pressing as a full-time job. Restaurants do a brisk business feeding everyone from families to students to single professionals. While there will always be a market for leisurely fine dining, more often than not customers seek convenience and foods that can be eaten on the go. Taste, while important, frequently takes a back seat to convenience. Consumers often seek any quick meal to fill their bellies while en route to next part of their busy days. The National Restaurant Association, the restaurant industry's major trade group Washington, projected $511 billion of consumer spending in restaurants for 2006, up 5.1% from the previous year (Brandweek, June 2006), and the NPD Group found that systemwide traffic at major chains was up 3% from the previous year for the period ending August 2006 (Nation's Restaurant News, December 2006). For 2007, the National Restaurant Association expects another 5% rise to $537 billion in 2007 (Nation's Restaurant News, December 2006). These statistics reflect long-term trends in Americans' eating patterns. While in 1985, the average American purchased 177 meals at restaurants, that number was 194 in 1995, 211 in 2000, and 203 in 2005, according to the NPD Group's Crest Service (Nation's Restaurant News, June 2006). In spite of the dip between 2000 and 2005, one anticipates from the National Restaurant Association figures that the 2010 number will be up, and the trend seems that overall Americans are spending more on food in general than in the past and even more in restaurants. The US Department of Labor's April 2006 report "Consumer Expenditures in 2004" writes, "Spending increases in 2004 on both food at home (7.0 percent) and food away from home (10.1 percent) were larger than they had been in several years." Americans' desire for convenience and on-the-go eating is reflected in the fact that restaurant takeout is a booming business. From 1985 to 2005, restaurant takeout and delivery shot up 73%, according to the NPD Group's Crest Service, which also found that 54% of adult-only parties ate restaurant meals at home in 2006, up 15% from 2001 data (Nation's Restaurant News, December 2006). In another study, the NPD Group's Crest Service determined that 61.1% of 2006 restaurant meals were eaten off-premises, compared with 59.2% of 2001 restaurant meals (Nation's Restaurant News, January 2007). In short, restaurant food comprises a sizable percentage of Americans' diets. Restaurants are successfully competing for market share by making the purchase and consumption of their products convenient. Restaurants are also adapting to changing attitudes towards meal times, meal sizes, and health issues. Developments in Convenience The foodservice industry continues to seek ways to appeal to consumers' need for convenience. One development relies on no major innovation: chains are simply opening up more locations to make their foods more accessible. Customers simply don't want to travel far to eat. For the year ending August 2006, unit expansion was up 3% at both major and small chains which analysts cite as the key driver of the year's growth (Nation's Restaurant News, December 2006). Longer operating hours serves the many Americans who work late or otherwise don't stick to a traditional 9-to-5 schedule. In addition, restaurants have increased their use of cashless payment systems which can speed transactions and appeal to those who don't have the time to get to a bank or ATM to withdraw cash. Restaurant use of credit, debit, or gift cards has increased 21% from 2001 to 2006, according to NPD data (Nation's Restaurant News, December 2006). Meanwhile, 2006 data from the National Restaurant Association notes in its "2007 Restaurant Industry Forecast" that three of five QSRs offer self-serve beverage stations, up 54% from 2000. |
