Table of Contents
Executive Summary
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- Top takeaways
- Target audience overview
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- Figure 1: Value consumer segmentation, November 2020
- Figure 2: Total US sales and forecast of restaurants and eating places, by segment, at current prices, 2015-25
- Impact of the COVID-19 crisis on restaurant value and pricing
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- Figure 3: Short-, medium- and long-term impact of COVID-19 on restaurant value and pricing, January 2021
- Opportunities and challenges
- FSRs must win back middle-income households
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- Figure 4: Value behaviors, by household income, November 2020
- Retail foodservice steals occasions from operators
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- Figure 5: Prepared food purchasing frequency year over year, September 2020
- Deliver convenience first
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- Figure 6: Value definition – NET any rank, by generation, November 2020
- Focus price incentives on adding value, not shrinking margins
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- Figure 7: Value attitudes, by household income, November 2020
- Drive digital channel usage with digital-only deals
The Market – Key Takeaways
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- Serious Value Seekers tend to be younger, middle-income and financially strained
- Gap widens in US between the haves and have nots
- Restaurant sales losses, rising food prices make low prices harder to compete on
Value Diners by the Numbers
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- Most Americans are Value Seekers
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- Figure 8: Value consumer segmentation, November 2020
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- Figure 9: Value consumer segmentation, November 2020
- Figure 10: Value consumer segmentation – Serious Value Seekers, November 2020
- Divide grows between haves and have nots
- This divide factors more into price needs than value ones
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- Figure 11: Share of aggregate income received by each fifth and top 5% of households, 1970-2019
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- Figure 12: Restaurant ordering methods – Any dined at a restaurant NET, by household income, July-September 2020
- Impact of the COVID-19 crisis on restaurant value and pricing
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- Figure 13: Short-, medium- and long-term impact of COVID-19 on restaurant value and pricing, January 2021
- The COVID-19 pandemic: US context
Market Factors
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- The 2020 recession will have worse outcome for restaurants than Great Recession
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- Figure 14: US restaurant sales, at current prices, 2008-13
- FSRs must make extra investments to compete with LSRs on value
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- Figure 15: Total US sales and forecast of restaurants and eating places, by segment, at current prices, 2015-25
- Figure 16: Market share of total US sales and forecast of restaurants and eating places*, by segment, 2019-25
- Unemployment rates remain high, especially among Black and Hispanic Americans
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- Figure 17: Hispanic, Black and overall US labor unemployment rates, January 2007-November 2020
- High food costs force restaurants to consider raising prices
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- Figure 18: Changes in Consumer Food Price Indexes, 2018-2021
- Retail foodservice threat grows as value-friendly option with more people grocery shopping
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- Figure 19: Prepared food purchasing frequency year over year, September 2020
Market Opportunities
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- Make convenience the top priority
- Home in on smart, budget-friendly deals during recession recovery
- Flexible formats satisfy varied daypart needs
- Drive demand with LTOs
Companies and Brands – Key Takeaways
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- Drive digital usage with digital-only deals
- Offer more budget-friendly options outside of core dayparts
- Encourage repeat purchases with subscription services
Competitive Strategies
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- Loyalty programs make mainstream debut
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- Figure 20: Value behaviors – CHAID – Tree output, November 2020
- Family meal deals proliferate
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- Figure 21: Chick-fil-A email “Introducing easy meal ordering to feed your family,” April 3, 2020
- Subscription programs drive repeat purchases
- Off-peak dayparts boost incremental revenue
The Consumer – Key Takeaways
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- Taste and quality are cornerstones of restaurant value
- Appeal to women with budgeting and men with convenience
- Two adult entrées for a discounted price tops value option interest
Value Consumer Segmentation
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- The vast majority of Americans prioritize value when dining out
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- Figure 22: Value consumer segmentation, November 2020
- Gen Zs are the least likely of any generation to care about value
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- Figure 23: Value consumer segmentation, by generation, November 2020
Value Definition
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- Taste/quality is more important than price to good restaurant value
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- Figure 24: Value definition – NET – Any rank, November 2020
- Value Rejecters are most likely to prioritize easy ordering options
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- Figure 25: Value definition – NET – Any rank, by value consumer segmentation, November 2020
- Women equate fresh preparations with a good value
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- Figure 26: Value definition – NET – Any rank, by gender, November 2020
- Young consumers prioritize speed and convenience for value equation
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- Figure 27: Value definition – NET – Any rank, by generation, November 2020
- Higher-earning Americans associate good value most with taste, quality
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- Figure 28: Value definition – NET – Any rank, by household income, November 2020
Value Perception by Foodservice Segment
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- Casual dining restaurants have strongest value perception
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- Figure 29: Value perception by foodservice segment, November 2020
- Millennials have highest value perception of foodservice overall
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- Figure 30: Value perception by foodservice segment – NET – Any good, by generation, November 2020
- White consumers are least likely to consider c-stores a good value
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- Figure 31: Value perception by foodservice segment – NET – Any good, by race and Hispanic origin, November 2020
- Dads have best value perception of fast food and c-store prepared foods
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- Figure 32: Value perception by foodservice segment – NET – Any good, by parental status and gender, November 2020
Value Behaviors
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- Recession further slows down foodservice recovery
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- Figure 33: Value behaviors, November 2020
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- Figure 34: Value behaviors – CHAID – Tree output, November 2020
- Men more likely to want premium ingredients, will pay for them
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- Figure 35: Value behaviors, by gender, November 2020
- Millennials are the most engaged with restaurant loyalty programs
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- Figure 36: Value behaviors, by generation, November 2020
- Lower-income consumers not dining out less due to recession, despite financial constraints
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- Figure 37: Value behaviors, by household income, November 2020
Value Option Interest by Restaurant Segment
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- Discounted entrées at full-service restaurants have widespread appeal
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- Figure 38: Value option interest by restaurant segment, November 2020
- Figure 39: Value option interest by restaurant segment – NET – Any restaurant segment, November 2020
- Young consumers want off-peak daypart value options
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- Figure 40: Value option interest by restaurant segment – NET – Any restaurant segment, by generation, November 2020
- Dads are by far the most interested in restaurant subscription programs
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- Figure 41: Value option interest by restaurant segment – NET – Any restaurant segment, by parental status and gender, November 2020
Value Attitudes
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- Consumers aren’t very interested in a new tipping structure at restaurants
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- Figure 42: Value attitudes, November 2020
- Young consumers rely on social media for restaurant deals
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- Figure 43: Value attitudes, by generation, November 2020
- FSRs must work extra hard to appeal to lower-income consumers with budget-friendly options
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- Figure 44: Value attitudes, by household income, November 2020
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 45: Total US sales and forecast of limited-service eating places*, at inflation-adjusted prices, 2015-25
- Figure 46: Total US sales and forecast of full-service restaurants, at inflation-adjusted prices, 2015-25
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Appendix – The Consumer
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- CHAID Methodology
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- Figure 47: Dine-in intentions, by household income, September 2020
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- Figure 48: Value perception by foodservice segment – NET – Any good, by value consumer segmentation, November 2020
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- Figure 49: Value option interest by restaurant segment – NET – Any restaurant segment, by value consumer segmentation, November 2020
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- Figure 50: Value attitudes, by value consumer segmentation, November 2020
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