Table of Contents
Executive Summary
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- Market overview
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- Figure 1: Total US revenues and forecast sales ranges of restaurants and eating places*, at current prices, 2014-24
- Top takeaways
- Impact of COVID-19 on restaurant marketing strategies
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- Figure 2: Short-, medium- and longer-term impact of COVID-19 on restaurant marketing, June 2020
- The issues
- COVID-19 reverses consumer food spending habits
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- Figure 3: COVID-19 spending priorities, May-June 2020
- Economic instability provides impetus for delayed or slow recovery
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- Figure 4: Consumer Sentiment Index, January 2007 – May 2020
- Brands can’t necessarily control word-of-mouth marketing
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- Figure 5: Information sources, April 2020
- The opportunities
- Use fluid and timely messaging to stay relevant
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- Figure 6: Communication topics, April 2020
- Instant gratification promotions make it easy for diners to save
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- Figure 7: Promotion interest, April 2020
- Encourage diners to opt into mobile platforms with promise of relevant content and incentives
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- Figure 8: Restaurant marketing attitudes, April 2020
- Focus on off-premise applications to build business
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- Figure 9: Change in takeout and delivery frequency, March and April 2020
Impact of COVID-19 on Restaurant Marketing
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- Figure 10: Short, medium and long term impact of COVID-19 on restaurant marketing, June 2020
- Opportunities and Threats
- Transparency and trust issues plague chains
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- Figure 11: Restaurant marketing attitudes, by generation, April 2020
- Value will help consumers balance safe spending with dining
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- Figure 12: Promotion interest, April 2020
- Shifts in food spending will require operator pivots
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- Figure 13: COVID-19 spending priorities, May-June 2020
- Off-premise will play a larger role, operators will need to continually reset
- Impact on restaurant marketing
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- Figure 14: Total US revenues and forecast sales ranges of restaurants and eating places*, at current prices, 2014-24
- LSRs were better equipped for the pandemic and will recover faster
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- Figure 15: Total US revenues and forecast sales ranges of restaurants and eating places*, by segment, at current prices, 2014-24
- Regardless of size, operators must think and act locally
- How the crisis will affect key consumer segments
- Brands will need multi-layer strategies to cast the widest net
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- Figure 16: Figure 17: Information sources, by generation, April 2020
- Solutions-focused messaging resonates with convenience-focused families
- How a COVID-19 recession will reshape the restaurant industry
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- Figure 18: Consumer Sentiment Index, January 2007 – May 2020
- Figure 19: unemployment rates, 2008-June 2020
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- Figure 20: Consumer spending on food away from home, monthly, 2006-10
- Figure 21: Consumer spending on food away from home, annual, 2000-19 and Q1 2020
- COVID-19: US Context
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The Market – What You Need to Know
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- Restaurants enter uncharted territory
- Off-premise dining bodes well for LSRs
- Restaurants compete against meal delivery kits
- Restaurant spending is less of a priority
Market Size and Forecast
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- 2020 puts foodservice industry in uncharted waters
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- Figure 22: Total US revenues and forecast sales ranges of restaurants and eating places*, at current prices, 2014-24
Market Breakdown
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- LSRs were better equipped for pandemic, and subsequent recession
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- Figure 23: Total US revenues and forecast sales ranges of restaurants and eating places*, by segment, at current prices, 2014-24
- FSR marketers must adapt, follow LSRs to catch up
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- Figure 24: Year-over-year change in restaurant visitation, November 2019
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- Figure 25: Restaurant usage by segment, April 2020
Market Perspective
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- Consumers spending more on at-home food
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- Figure 26: COVID-19 spending priorities, May-June 2020
- Meal kits come on strong to take a bite of foodservice limitations
Market Factors
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- Economic instability is a threat for restaurants
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- Figure 27: Consumer Sentiment Index, January 2007 – May 2020
- Figure 28: unemployment rates, 2008-June 2020
- Digitally savvy, younger diners will be catalysts for tech and dining
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- Figure 29: Population by generation, 2014-24
- Digital marketing strategies can resonate with convenience-seeking families
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- Figure 30: Households by presence of related children, 2008-18
- Takeout and delivery help restaurants survive during COVID-19 and beyond
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- Figure 31: Change in takeout and delivery frequency, March and April 2020
Key Players – What You Need to Know
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- Messaging remains fluid in times of crisis
- Personalized digital deals are working
- Bailout backlash impacts operators
- Restaurants embrace off-premise occasions
What’s Working
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- Adaptive and timely messaging
- Step 1: safety, sanitation, and support
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- Figure 32: Olive Garden email, “Our Commitment to You,” March 14, 2020
- Step 2: empathetic messaging
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- Figure 33: Texas Roadhouse email, “We’re Here for You & Open for To-Go,” March 17, 2020
- Figure 34: Jimmy John’s email, “Distance Socially, Eat Locally,” April 9, 2020
- Step 3: operational shifts to off-premise experiences
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- Figure 35: IHOP email, “Introducing IHOP Curbside Pick-Up,” April 3, 2020
- Step 4: community support
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- Figure 36: Moe’s Southwest Grill email, “First Responder Burrito Donation,” April 15, 2020
- Step 5: dining room safety measures
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- Figure 37: BoneFish Grill email, “Our Dining Room is Open,” May 20, 2020
- Digital communications and loyalty programs
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- Figure 38: Marketing-related behaviors, April 2020
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- Figure 39: Restaurant marketing attitudes, April 2020
- Brands in action
- Starbucks
- Chick-fil-A
- Chipotle Mexican Grill
- Chili’s
What’s Struggling
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- Chain restaurants face transparency and trust issues
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- Figure 40: Restaurant marketing attitudes, by generation, April 2020
- Scrutiny against large restaurant chains that acquired funding under PPP
What’s Next
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- Off-premise options support longer-term growth
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- Figure 41: Change in takeout and delivery frequency, March and April 2020
The Consumer – What You Need to Know
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- Digital strategy can support word-of-mouth marketing
- Promotional value must be easily understood
- Menu photos and descriptions greatly influence consumer choice
- Consumers are receptive to digital and social marketing
- Food quality and innovation are key areas of interest
- Restaurateurs must remain adaptable to consumer needs
Restaurant Discovery and Information Sources
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- Friends/family, personal connections are pivotal to discovery
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- Figure 42: Information sources, April 2020
- Online/social media sources effective in reaching younger generations
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- Figure 43: Information sources, by generation, April 2020
- Parents learn about restaurants through third-party delivery
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- Figure 44: Information sources, by parental status, April 2020
- Targeted efforts are necessary to reach ethnic groups
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- Figure 45: Information sources, by race/Hispanic origin, April 2020
Promotion Interest
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- BOGO deals, discounts will drive most traffic
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- Figure 46: Jimmy John’s Facebook post
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- Figure 47: Promotion interest, April 2020
- Young diners expect free delivery, show less interest in BOGO deals
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- Figure 48: Promotion interest, by age, April 2020
- Kids deals + third-party delivery makes good sense
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- Figure 49: Dickey’s Barbecue Pit digital ad
- Figure 50: Promotion interest, by parental status, April 2020
Restaurant Marketing Strategies
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- Menu photos and descriptions are most effective
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- Figure 51: Restaurant marketing strategies, April 2020
- Gen Z is most receptive to digital marketing
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- Figure 52: Restaurant marketing strategies, by generation, April 2020
- Parents influenced by drive-thru menu marketing strategies
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- Figure 53: Restaurant marketing strategies, by parental status, April 2020
Marketing-related Behaviors
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- Deals are frequency drivers, not necessarily trial drivers…
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- Figure 54: Marketing-related behaviors, April 2020
- …but social media influencers can attract new diners
- Geotargeting may be polarizing
- Loyal diners are more influenced by social media
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- Figure 55: Restaurant marketing statement agreement, by restaurant loyalty status, April 2020
- Tap mobile and social marketing to inform Gen Z about LTOs and deals
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- Figure 56: Burger King Facebook Ad, June 2020
- Figure 57: Marketing-related behaviors, by generation, April 2020
- Parents engage with a variety of marketing tactics
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- Figure 58: Marketing-related behaviors, by parental status, April 2020
- Marketers must emphasize value, at-home experiences to engage Hispanic consumers
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- Figure 59: Marketing-related behaviors, by Hispanic origin, April 2020
Communication Topics
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- Diners want to hear about quality and innovation
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- Figure 60: Communication topics, April 2020
- Communication topics shift amid pandemic but balance is needed
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- Figure 61: Longhorn Steakhouse email, “Our Commitment to You,” March 15, 2020
- Support food quality with food safety and ingredient sourcing
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- Figure 62: TURF Analysis – Communication topics, April 2020
- Oldest generations want to know more about safety/sanitation
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- Figure 63: Future activities, going to a restaurant, by generation, June 11-24, 2020
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- Figure 64: Communication topics, by generation, April 2020
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- Figure 65: Chipotle email, “Turn your spare change into social change,” June 19, 2020
- Nonparents are more interested in menu innovation
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- Figure 66: Communication topics, by parental status, April 2020
Restaurant Marketing Attitudes and Behaviors
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- Restaurants must listen and form personal connections with diners
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- Figure 67: Restaurant marketing attitudes, April 2020
- Parents will share data to get a good deal
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- Figure 68: Restaurant marketing attitudes, by parental status, April 2020
- Gain trust through charitable, ethical actions
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- Figure 69: Shake Shack email, “Listen. Learn. Act.,” June 5, 2020
- Young diners want restaurants to partner with charities
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- Figure 70: Restaurant marketing attitudes, by age, April 2020
Appendix – Data Sources and Abbreviations
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- Data sources
- Forecast
- Consumer survey data
- Consumer qualitative research
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 71: Total US revenues and forecast sales ranges of restaurants and eating places*, by segment, at inflation-adjusted prices, 2014-24
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Appendix – The Consumer
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- TURF Methodology
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- Figure 72: Table - TURF Analysis – restaurant marketing strategies, April 2020
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- Figure 73: Table - TURF Analysis – Communication topics, April 2020
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