Family/Midscale Restaurants - US - November 2009

SCOPE AND THEMES
What you need to know
Definition
Data sources
Sales data
Mintel Menu Insights
Consumer survey data
Advertising creative
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
The challenge of a recession
Declining same-store sales signals trouble with guest traffic
It’s a “diner’s market”—value prices result from excess supply of restaurant choices
Influential demographics—age and race/Hispanic origin
Family restaurant analysis
IHOP
Denny’s
Cracker Barrel
Golden Corral
Bob Evans Farms
Menu focus: IHOP
Advertising and promotion activity
Menu innovation—comfort and breakfast
Health on the menu—a long way to go
The family restaurant consumer
Where consumers go to eat
Which family restaurants consumers go to
Family restaurants and the ethnic consumer
Family restaurants and “the family”
What influences diners to choose family restaurants
Reasons that drive choice of restaurants
When, where and how consumers eat at restaurants
INSIGHTS AND OPPORTUNITIES
Key points
Beverage menu opportunity—gourmet coffee
Taking a cue from McDonald’s
Beverages offered by family restaurants
Figure 1: Top family restaurant beverage items, by type, Q3 2007-Q3 2009
“Recession obesity” now leads to health opportunity for the future
Junk food and cheap eats
Family restaurants poised to dish out the comfort…
…but it’s time to be forward-thinking
The big bonus—there’s money in health
INSPIRE INSIGHTS
Inspire trend: Spread Awareness Across the Social Web
The social media advantage
Supporting evidence
Figure 2: Change in adspend, top six family restaurant advertisers, 2007-08
Implications
Inspire trend: A Tea a Day Will Keep the Doctor at Bay
A drink from health-claim heaven
Supporting evidence
Implications
MARKET SIZE AND FORECAST
Key points
Declining same-store sales trends signal guest traffic troubles
Figure 3: Selected family restaurant chains same-store sales growth trends, 2005-09
Family restaurants feeling pressure as diners trade down/out
The future of family restaurants
Figure 4: Total U.S. systemwide sales of leading family restaurants, at current prices, 2005-13
Figure 5: Total U.S. systemwide sales of leading family restaurants, at inflation-adjusted prices, 2005-13
COMPETITIVE CONTEXT
It’s a diner’s market
Casual restaurants: Discounting galore and “all you can eat” specials
QSR: Actively courting the breakfast consumer
Pizza: A convenient family pleaser
Fighting over the kids
MARKET DRIVERS
Restaurant industry recession continues, but the bottom may be in sight
Figure 6: Restaurant Performance Index, current situation, and expectations, May 2007-July 2009
Consumer confidence undermines willingness to spend at restaurants
Figure 7: Consumer Sentiment Index, by quarter, 2001-09
Figure 8: Family restaurant spend compared to last year, by age, household income and race/Hispanic origin, July 2009
Baby Boomers key consumers; Millennials offer growth potential
Figure 9: Usage of family restaurant, top restaurants, by age, February 2008-March 2009
Figure 10: Population aged 18 or older, 2004-14
Usage among the fastest-growing ethnic groups lags
Figure 11: Usage of family restaurant, top restaurants, by race/Hispanic origin, February 2008-March 2009
Figure 12: Population, by race and Hispanic origin, 2004-14
LEADING COMPANIES
Key points
Leading family restaurant chains weather the recessionary storm
Figure 13: U.S. systemwide sales of leading family restaurant chains, 2006-08
Unit growth declining incrementally
Figure 14: U.S. systemwide units for leading family restaurant chains, 2006-08
RESTAURANT ANALYSIS: IHOP
Key points
Growth trends
Figure 15: Change in IHOP systemwide same-store sales, 2005-08
Keeping the brand fresh and energized
Value-oriented, limited-time offers
Marketing and promotion drive brand awareness
Demographic connections
Attracting higher-income consumers through customizable options
Maximizing appeal for parents of little ones
Ethnic opportunities
Figure 16: Eat at IHOP, by age, race/Hispanic origin and household income, February 2008-March 2009
RESTAURANT ANALYSIS: DENNY’S
Key points
Growth trends
Figure 17: Change in Denny’s same-store sales, 2005-08*
Seeking improvements in 2009 through value and innovation
Value—free food incentive to drive guest traffic
Menu innovation—diversity plus a new burger focus
Health initiatives—innovation on the kids’ menu
Courting key demographics
Making the late-night connection with its young diners
Hispanics
Figure 18: Eat at Denny’s, by age and race/Hispanic origin, February 2008-March 2009
RESTAURANT ANALYSIS: CRACKER BARREL
Key points
Growth trends
Figure 19: Change in Cracker Barrel systemwide same-store sales, 2005-09*
A differentiated concept
The front porch environment
The retail shop
Successful at lunch and dinner—driving average check higher
Figure 20: Cracker Barrel, share of sales by daypart, 2009
Streamlining traditional menu
The Cracker Barrel customer
Figure 21: Eat at Cracker Barrel, by age, region, race/Hispanic origin and presence of children, February 2008-March 2009
RESTAURANT ANALYSIS: GOLDEN CORRAL
Key points
Growth trends
The buffet advantage
New prototype
An abundance of choices for all
Potential to expand ethnic reach
Figure 22: Eat at Golden Corral, by race/Hispanic origin, February 2008-March 2009
RESTAURANT ANALYSIS: BOB EVANS FARMS
Key points
Growth trends
Figure 23: Change in Bob Evans annual prices and systemwide same-store sales, 2005-09*
Regional brand with national presence
Home-style menu
Figure 24: Bob Evans Farms, share of sales, by daypart and average check, 2009
Strong regional influence; little ethnic appeal
Figure 25: Eat at Bob Evans, by region and race/Hispanic origin, February 2008-March 2009
MENU ANALYSIS: IHOP
Overview
Menu favorites: Breakfast items are the clear winner
Men look for heartier fare
Figure 26: IHOP menu ordering on last visit, by gender, July 2009
Young diners look beyond the traditional breakfast menu when ordering
Figure 27: IHOP menu ordering on last visit, by age, July 2009
ADVERTISING AND PROMOTION
Overview
Figure 28: Top family restaurant chain advertisers, 2007 and 2008
Targeting competition with a $5 price point
Sizzler’s strategy: Limited value menu
Figure 29: Sizzler, 5 for $5, March 2009
Bob Evans’ strategy: Value portions
Figure 30: Bob Evans, Deep Dish Pastas, September 2009
Shoney’s strategy: Abundance
Figure 31: Shoney’s, Small Amounts of Food, September 2009
Strategy: Value menu
Justifying a higher price point
Strategy: Entice customers who equate value with quantity and choice
Figure 32: Golden Corral, Amusement Park of Food, September 2009
Figure 33: Ponderosa, Freedom by the Plateful, July 2009
Figure 34: Friendly’s, Flip chart presentation, September 2009
INNOVATIONS AND INNOVATORS
 MENU INNOVATION
Key points
Comfort foods top innovation
Homemade equals familiarity
Country style equals southern comfort
Figure 35: Top family restaurant menu items, by marketing claim, Q3 2007-Q3 2009
Breakfast innovation
Figure 36: Family restaurant usage, by daypart, July 2009
Figure 37: Top family restaurant menu items, by menu item dish, Q3 2007-Q3 2009
 HEALTH ON THE MENU
Key points
Health: Consumers’ perceptions
Figure 38: Consumer diet self-perceptions, degree of healthfulness, July 2009
Figure 39: Importance of eating healthy, degree of importance, July 2009
Defining health
Nutritional menu items lacking
Figure 40: Top family restaurant menu items, by nutritional claim, Q3 2007-Q3 2009
Eliminating the veto factor
RESTAURANT USAGE OVERVIEW
Key points
Restaurant usage
Figure 41: Restaurant usage in last year, by selected demographics, July 2009
Restaurant usage, by segment
Demographic analysis
Figure 42: Usage of restaurant segments in past three months, by gender, July 2009
Figure 43: Usage of restaurant segments in past three months, by age, July 2009
Figure 44: Usage of restaurant segments in past three months, by household income, July 2009
Figure 45: Usage of restaurant segments in past three months, by presence of children in household, July 2009
Consumer question explanation
FAMILY RESTAURANT USAGE
Key points
2000-08 usage trends
Figure 46: Usage of “top 6” family restaurants, 1999/2000-2007/08
Family restaurant usage
Figure 47: Usage of leading family restaurant chains, by restaurant, July 2009
Demographic analysis
Figure 48: Usage of leading family restaurant chains, by restaurant, by gender, July 2009
Figure 49: Usage of leading family restaurant chains, by restaurant, by age, July 2009
Figure 50: Usage of leading family restaurant chains, by restaurant, by presence of children, July 2009
FAMILY RESTAURANT USAGE—IMPACT OF RACE AND HISPANIC ORIGIN
Key points
Family restaurant usage by race/Hispanic origin
Figure 51: Top family restaurant usage, by restaurant, by race/Hispanic origin, October 2007-December 2008
Acculturated versus non-acculturated Hispanics
Figure 52: Top family restaurant Hispanic usage, by restaurant, by degree of English spoken in home, October 2007-December 2008
FAMILY RESTAURANT USAGE AND KIDS
Key points
Parents take kids to family restaurants
Figure 53: Likelihood of children going with parents to pizza, family and casual restaurants, July 2009
Figure 54: Likelihood of children going with parents to family restaurants, by selected demographics, July 2009
FAMILY RESTAURANT DECISION INFLUENCERS
Key points
Competitive analysis: Pizza, family, and casual restaurants
Figure 55: Pizza, family, and casual restaurant decision influencers, July 2009
Demographic analysis: Influencing factors for choosing family restaurants
Figure 56: Family restaurant influencers, by gender, July 2009
Figure 57: Family restaurant influencers, by age, July 2009
FAMILY RESTAURANTS: REASONS CONSUMERS CHOOSE THEM
Key points
Competitive analysis: Pizza, family and casual restaurants
Figure 58: Reasons to eat out at pizza, family and casual restaurants, July 2009
Demographic analysis: Reasons consumers eat out at family restaurants
Figure 59: Reasons to eat out at family restaurants, by gender, July 2009
Figure 60: Reasons to eat out at family restaurants, by age, July 2009
FAMILY RESTAURANTS: USAGE BY DAYPART
Key points
Breakfast differentiates family restaurants
Figure 61: Restaurant mealtimes, daypart, by segment, July 2009
Figure 62: Family restaurant mealtimes, daypart, by gender, July 2009
Figure 63: Family restaurant mealtimes, daypart, by age, July 2009
FAMILY RESTAURANT USAGE BY PROCUREMENT METHOD
Key points
Competitive analysis: Pizza, family, and casual restaurants
Figure 64: Pizza, family and casual restaurant delivery, pickup and dine-in purchases, July 2009
Demographic analysis: Procurement method at family restaurants
Figure 65: Family restaurant delivery, pickup and dine-in purchases, by age, July 2009
CLUSTER ANALYSIS
Alternatives
Who they are
Opportunity
Simple-ists
Who they are
Opportunity
Familiars
Who they are
Opportunity
Cluster characteristics
Figure 66: Family restaurant clusters, July 2009
Figure 67: Family restaurant decision influencers, by family restaurant clusters, July 2009
Figure 68: Reasons to eat out at family restaurants, by family restaurant clusters, July 2009
Figure 69: Family restaurant mealtimes, daypart, by family restaurant clusters, July 2009
Cluster demographics
Figure 70: Family restaurant clusters, by gender, July 2009
Figure 71: Family restaurant clusters, by age, July 2009
Figure 72: Family restaurant clusters, by household income, July 2009
Figure 73: Family restaurant clusters, by race, July 2009
Figure 74: Family restaurant clusters, by Hispanic origin, July 2009
Cluster methodology
CUSTOM CONSUMER: MARITAL STATUS AND PRESENCE OF CHILDREN
Overview
Singles without kids are the least likely users; married with kids are core users
Figure 75: Usage of family restaurants in past three months, by marital status and presence of children in household, July 2009
Married couples look for cost-saving measures; those with kids influenced by media
Figure 76: Family restaurant influencers, by marital status and presence of children in the household, July 2009
Family restaurants provide singles with a social scene and save households with kids some time
Figure 77: Reasons consumers eat out at family restaurants, by marital status and presence of children in household, July 2009
APPENDIX: ADDITIONAL CONSUMER TABLES—INCOME
Figure 78: Usage of leading family restaurant chains, by restaurant, by household income, July 2009
Figure 79: Reasons consumers eat out at family restaurants, by household income, July 2009
Figure 80: Family restaurant delivery, pickup and dine-in purchases, by household income, July 2009
Figure 81: Family restaurant mealtimes, by household income, July 2009
APPENDIX: TRADE ASSOCIATIONS