Here’s Why Diners Are Losing Their Appetite
Bonnie Riggs, a veteran researcher at the NPD Group, noticed a numerical anomaly as she examined last year’s industry traffic. It stopped halfway through 2016, then nosedived.
Restaurant traffic — also known as guest counts — had been inching up about 1% annually since 2010 before slowing early last year. “And then in Q2, it came to a standstill. In Q3 it went negative,” she said. “We’d never seen that, and I asked, ‘What’s going on?’”
The full answer can be found in an NPD report, “Losing Our Appetite For Restaurants,” published late last year (and available on NPD’s website).
To collect data, Riggs used an existing NPD panel of 52,000 consumers, whom she queried about eating out. Riggs then divided consumers into four groups, depending on monthly restaurant visits: heavy users (>3 times); medium users (>2 times); light users (1 time); and, super-light (<1 time).
Heavy users accounted for 47% of total users surveyed; medium users were 20% of the total. Meanwhile, the super-light category surprised Riggs. “I’d never seen that before,” she added.
After analyzing the data, she calculated that if operators could get one more visit per month from light users they could ring up a collective $1.1 billion in sales. “It’s the only way to build business,” Riggs insists.
Wouldn’t simply raising prices do the same thing? No, Riggs declared. The climbing cost of food-away-from-home is one reason guest counts are falling in the first place. Her data shows that diners believe restaurant meals are now too costly.
What will bring them back more often? Loyalty programs, apparently. “Consumers said, ‘Reward me for my business and give me good customer service,’” Riggs explained, adding restaurants should also differentiate themselves. “We have too many operators doing the same thing.”