Table of Contents
Executive Summary
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- What consumers want and why
- The issues
- Casual and family midscale restaurants face declining visitation
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- Figure 1: Year-over-year change in restaurant visitation, November 2019
- LSRs are big competition
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- Figure 2: Total US revenues and forecast of restaurants and eating places*, by segment share, at current prices, 2019 and 2024
- Competition from at-home meals, price and quality concerns create challenges
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- Figure 3: Reasons for dining at casual dining restaurants less often, November 2019
- The opportunities
- Healthy menu items, value-based offers can increase FSR visitation
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- Figure 4: Full service dining motivators, November 2019
- Family time and consistency matters
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- Figure 5: Full service dining behaviors, November 2019
- Attract Gen Z on and off premise
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- Figure 6: Full service dining motivators, by generation, November 2019
The Market – What You Need to Know
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- FSR growth is challenged as LSRs compete on convenience and quality
- At-home cooking perceived as healthier and is a continued threat
- FSRs are more than OK with Boomers
Market Size and Forecast
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- FSR segment projected to have moderate sales growth
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- Figure 7: Total US revenues and fan chart forecast of full service restaurants, at current prices, 2014-24
- Figure 8: Total US revenues and forecast of full service restaurants, at current prices, 2014-24
Market Breakdown
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- Casual dining segment is second largest
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- Figure 9: Share of top 200 restaurant chain sales, 2018
- A focus on menu innovation helps some chains grow
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- Figure 10: Change in sales of top 30 casual and family/midscale chains from 2017-18*
Market Perspective
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- LSR growth outpaces FSR
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- Figure 11: Total US revenues and forecast of restaurants and eating places*, by segment share, at current prices, 2019 and 2024
- Figure 12: Total US revenues and forecast of restaurants and eating places*, by segment, at current prices, 2019 and 2024
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- Figure 13: Top 10 fast casual restaurant chain percentage change in sales over prior year, 2018
- Two in five consumers plan to cook at home more in 2020
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- Figure 14: Planned dining out behavior for 2020, October 2019
Market Factors
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- Focus on Baby Boomers’ evolving needs
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- Figure 15: Population, by generation, 2014-24
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- Figure 16: Median household income, by age of householder, 2018
- Positive economic conditions help FSRs
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- Figure 17: Consumer Sentiment Index, January 2007-December 2019
- Figure 18: Disposable personal income change from previous period, January 2007-November 2019
Key Players – What You Need to Know
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- Off premise is big business for FSRs
- Midscale operators struggle in a sea of sameness
- On-premise technology enables better customer service
What’s Working
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- Restaurant chains invest in hybrid delivery programs
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- Figure 19: Outback Steakhouse email “Precious cargo inside,” January 15, 2019
- Figure 20: Red Robin Gourmet Burgers email “Get 15% off delivery or to-go!,” January 16, 2019
- FSR loyalty programs channel successful LSR loyalty programs
- Meal deals for off-peak occasions
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- Figure 21: Olive Garden email “Try any lunch favorite for just $7.99!,” October 28, 2019
- Figure 22: Longhorn Steakhouse email “3 Courses. $12.99,” January 6, 2020
- International fine dining cuisines provide inspiration for casual operators
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- Figure 23: Select fast-growing menu item cuisine types at fine/upscale/gourmet restaurants, Q4 2016-Q4 2019
What’s Struggling
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- Struggling family midscale chains should take inspiration from segment standouts
What to Watch
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- AI enhances diners’ on-premise experiences
- Ghost kitchens for FSRs
- More exciting kids meal options
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- Figure 24: IHOP’s The Addams Family limited time menu promoted on Facebook, September 2019
Full Service Dining Chain Advertising Spend
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- FSR online ad spend doesn’t always equate to sales gains
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- Figure 25: Online advertising spend volume for top 10 full service restaurant chains, January 21, 2019-January 20, 2020
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- Figure 26: Online advertising spend share by device for top 10 full service restaurant chains, January 21, 2019-January 20, 2020
The Consumer – What You Need to Know
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- Casual dining and family midscale visitation is down
- Appeal to parents with more kids meal options
- Don’t forget about Boomers
- FSR customers are looking for a good value
Restaurant Visitation
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- Two thirds of Americans have visited a casual dining restaurant
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- Figure 27: Restaurant visitation, November 2019
- Boomers overindex for FSR visitation
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- Figure 28: Restaurant visitation by generation, December 2019
- Higher income correlates with higher FSR visitation
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- Figure 29: Restaurant visitation by household income, November 2019
Year-over-year Change in Restaurant Visitation
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- Americans are visiting fine dining restaurants more often
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- Figure 30: Year-over-year change in restaurant visitation, November 2019
- Urban dwellers drive increase in FSR visitation
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- Figure 31: Year-over-year change in restaurant visitation – more, by area, November 2019
- Parents are visiting FSRs more often
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- Figure 32: Year-over-year change in restaurant visitation – more, by gender and parental status, November 2019
Reasons for Dining at Casual Dining Restaurants More Often
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- Value and quality are key drivers for increased visitation
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- Figure 33: Reasons for dining at casual dining restaurants more often, November 2019
- Older consumers look for value, while younger consumers look for more choices
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- Figure 34: Reasons for dining at casual dining restaurants more often, by age, November 2019
Reasons for Dining at Casual Dining Restaurants Less Often
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- At-home cooking is casual dining restaurants’ biggest competition
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- Figure 35: Reasons for dining at casual dining restaurants less often, November 2019
- Younger customers are visiting independent restaurants instead
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- Figure 36: Reasons for dining at casual dining restaurants less often, by age, November 2019
Restaurant Segment Associations
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- Fast casual and fine dining perceived as trendy, healthy
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- Figure 37: Correspondence Analysis – Symmetrical map – Restaurant segment associations, November 2019
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- Figure 38: Restaurant segment associations, November 2019
- Casual dining restaurants need to improve value perception among younger consumers
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- Figure 39: Restaurant segment associations – casual dining restaurants, by generation, November 2019
Full Service Dining Motivators
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- Appeal to diners with affordable and healthy meal options
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- Figure 40: Full service dining motivators, November 2019
- Price promotions and healthy menu items are strong visitation drivers
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- Figure 41: TURF Analysis – Full service dining motivators, November 2019
- Gen Zers are interested in more off-premise options from FSRs
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- Figure 42: Full service dining motivators, by generation, November 2019
Full Service Dining Behaviors
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- Family time is central to FSR visitation
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- Figure 43: Full service dining behaviors, November 2019
- Fine dining customers value experience over cost
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- Figure 44: Full service dining behaviors, by restaurant visitation, November 2019
- Parents may be willing to splurge for a special occasion
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- Figure 45: Full service dining behaviors, by parental status, November 2019
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Direct marketing creative
- Mintel Menu Insights (MMI)
- Abbreviations and terms
- Abbreviations
Appendix – The Market
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- Figure 46: Total US sales and forecast of restaurants and eating places* market, at inflation-adjusted prices, 2014-24
- Figure 47: Total US sales and forecast of limited service eating places*, at inflation-adjusted prices, 2014-24
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- Figure 48: Total US sales and forecast of full service restaurants, at inflation-adjusted prices, 2014-24
- Figure 49: Distribution of generations by race and Hispanic origin, 2019
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Appendix – The Consumer
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- Correspondence Analysis
- Methodology
- TURF Analysis
- Methodology
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