Foodservice Frugality Sticks to Consumers' Ribs

Survey shows penny pinching ways likely to continue even as economy improves

NEW YORK -- A recent study of foodservice customers conducted by leading market research firm Data Development Worldwide (DDW) shows that consumers are not likely to easily or quickly return to spending more on dining out even as the economy is improving. The foodservice sector has been hard hit by the economic downturn as consumers find ways to stretch household budgets. DDW's Know More Panel study found that a substantial number of foodservice customers are dining out less often.

When consumers do dine out, the majority finds ways to spend less during each visit. DDW's [image-nocss] survey showed that 37% of customers actively use coupons. Other money-saving activities include ordering less-expensive items; ordering tap water; skipping extras like appetizers, sides and desserts; and buying combo or bundled meals.

When asked whether an improving economy would change their behavior, a majority of respondents indicated they would actively continue to find ways to keep their spending in check.

"We're finding that at least for the near-term, consumers plan to maintain their value-based behavior when dining outside the home," said Chip Lister, managing director of DDW. "This puts a great deal of pressure on the foodservice industry to develop ongoing menu offerings and pricing strategies and tactics that take this into account. It's a time when the industry needs to consider ways to be stimulativeto give their customers an opportunity to get used to an improving economy."

The upper tier of casual dining establishments has taken the biggest hit with nearly half of customers acknowledging that they have reduced the frequency of visits.

"Strategies for more upscale casual dining establishments are especially complex in this marketplace," said Lister. "The challenge lies in motivating your customers but critically, maintaining the value of your brand."

DDW's Know More study surveyed U.S. foodservice customers in August 2009. DDW's proprietary Know More panel represents more than 3.4 million households, with more than 6 million U.S. consumers and more than 1.5 million consumers in Canada, the U.K. and Europe, Australia and Scandinavia.

New York City-based DDW is an independent U.S. market research company. Its covers foodservice, telecommunications, pharmaceuticals, consumer products, financial services, communications and traditional/new media.