Appetite for Eating Out Still Cautiously Frugal

Diners are still closely watching their discretionary spending, according to the latest research from Mintel, which reveals that 60 percent of restaurant-goers report that the recession has changed the way their family spends money. For foodservice operators, relief is still a long ways off, as 24 percent of people eating out plan to spend less in restaurants this year than they did in 2010.

“Even with the economy on the mend, consumers are still very cautious about increasing their restaurant spending,” says Eric Giandelone, Mintel's director of foodservice research. “The restaurant industry grew 2.1 percent to reach $403.5 billion last year, but if restaurant-goers reduce how much they spend when they eat out, or only spend as much as they did last year, restaurants could have a slow recovery ahead of them.”

One small bright spot is that 10 percent of interviewees do say they plan to spend more in restaurants in 2011, and consumers with the highest household incomes are most likely to make this claim. Still, of restaurant-goers who plan to spend more when they eat out, the most popular destination is a casual dining restaurant, according to 67 percent, which is good new for that sector as previous Mintel research found that 31 percent of diners who visited casual restaurants in 2010 were spending less than they did in 2009. This is good new for supermarket foodservice operators, too, because casual venues equate closely with supermarket foodervice operations.

“This focus on frugality isn’t likely to disappear any time soon,” says Giandelone. "For the near term, restaurants will still need to focus on value, such as limited-time offers (LTOs), small portion size options, kids-eat-free promotions, or other creative ideas to increase traffic with value pricing and help consumers feel more confident about spending their dollars at a restaurant instead of a grocery store.”

Price may be a major deterrent to increasing restaurant spending, with 63 percent of restaurant-goers saying it’s too expensive to eat out regularly. Not everyone is cutting back, though; some plan to stick with the status quo. Of those surveyed who have visited a restaurant in the past month, 66 percent say they plan to spend the same amount when dining out this year as they did last year.