Unemployment is down, but gas prices are up. The recession is "over," but the stock market is still wobbly. According to a new report from Technomic, all this makes consumers continuously concerned.
In a March 2011 survey of 500 consumers, the Chicago-based consultancy found that more than nine out of 10 of those polled (92%) indicated that they are still somewhat concerned about the economy.
[image-nocss]And rightfully so since a majority of consumers (46%) report their economic situation is about the same as it was six months ago; one-fifth of consumers (20%) indicate that they are doing much or somewhat better than they were six months prior, compared to one-third (34%) who indicate they are doing somewhat or much worse.
So what does this continued concern mean for the foodservice sector?
"Consumers have adjusted to the mindset of cutting back, and I think that mindset will continue until some major indicators improve -- employment, consumer confidence, economic growth, etc.," Tim Powell, director of research and consulting for Technomic, tells Fare Digest.
Based on the data collected in the study, more consumers today foresee less frequent dining out occasions ("every few months or less") at full-service, fast-casual and fast-food restaurants, compared to consumers polled two years ago.
This, of course, has been to the benefit of other channels. "A lot of consumers ditched restaurants and turned to convenience stores for items like pizza when they wanted a quick bite," says Powell. "Because when times are bleak, customers want something that can fill them up without breaking the bank."
There is one trend that has continued to be popular in both traditional and nontraditional foodservice: deals.
Slightly more than two in five consumers indicate they that have increased their usage of restaurant discounts, coupons and special promotions in the past six months. Likewise, third-party restaurant coupons such as Groupon or LivingSocial are increasing in popularity, as 30% of consumers report that they are using them more often.
"A buy-one-entree-get-one-free offer is still the most popular with consumers [at restaurants], although the appeal has diminished by 12 percentage points over the past two years," says Powell.
And as for c-store patrons, combo or bundle deals prove to be the most popular to attract new buyers. "Whether it is a coffee and muffin combo or sandwich and soda, customers almost always go for it because you're helping them stretch their dollar that much further," says Powell.
Overall, although the economy is on the rise, consumers will continue to hold back when it comes to discretionary spending--especially when it comes to dining out, no matter which option you choose.
Powell's advice on how to increase sales in the meantime: strategic marketing. "Signs need to be placed where customers can see them. Whether it's at a gas pump, in the stores or in a restaurant window, it's all about catching the consumer's eye."
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