Having undergone recession, the dining industry has finally seen some evidence of a gradual recovery, with restaurant spending predicted to rise by 3% in 2014. If this is achieved it will be the largest amount of growth in the sector since the recession began. The recession has led to a number of changes regarding how people dine out which the industry has responded to in order to ensure the survival and continued recovery of the sector. So with these changes is it the right time to invest in the food service sector?
One of the biggest changes in customer behaviour has been the rise in deals and promotions. People have clearly come to value these even more than previously and it can be a deciding factor when it comes to eating out. In 2013, just over a quarter of all snacks and full meals eaten out of the house were purchased on promotion. It seems to be the wrong move for restaurants to create a value menu, customers are willing to pay more for something which they perceive to be of good value and promotions are a way to ensure that, while mark ups may not be as high, consumers will buy a restaurant’s food.
There also seems to be increased emphasis on eating out with family. This often takes the form of a growing trend towards socialising over dinner as a form of family celebration. Consumers seem to be less willing to casually eat out, but when they find a reason, or as previously stated when they see a deal, they are more than willing to pay a sizeable sum of money. In order to get the best out of this, restaurants must cater to families.
In response to these, amongst other changes in current food consuming, the restaurant industry has undergone various transformations. The fast casual dining market is steadily growing, marketing itself as a mixture of good value (like fast food) and good service (like casual dining) both of which appeal to the needs of the customer, and food manufacturers have got on board with this producing specific products for casual dining. Existing restaurants have responded by improving their quick service output, while also introducing various new concepts and formats. There has also been an effort on behalf of the industry to update their menus and add health options, while aesthetically many have changed their décor in a bid to suit consumer needs.
Guy Fielding, director of business development for consumer analysis giants The NPD Group, summed up the zeitgeist of the impact of recession well, stating “If there is one thing the recession has taught operators in the foodservice sector, it is you need to adapt constantly to survive… value and differentiation will be vital to enjoy any of the low and slow recovery we’re predicting.”
If you are willing to adapt and evolve to what consumers are looking for, now might be the ideal time to invest before the recovery of the sector starts to really take off.