Families Are Dining Out A Lot Less
Casual dining chains started losing customers in 2007, and traffic has fallen every year since then, with little indication that it's stopping. In April, for instance, traffic fell 2.4 percent at casual dining chains, according to the latest Knapp Track Index of casual dining same store sales.
Here's a big reason why: Families are eating out less. A lot less.
According to the NPD Group, restaurant visits by families with children 13 years and under have been declining since 2008. Bonnie Riggs, NPD foodservice industry analyst, said that families made about 16 billion visits to restaurants in 2008. Last year, they made about 14.5 billion. That's a substantial decrease. Riggs said that visits declined considerably in 2009 and 2010 and has leveled off ever since.
"We've lost a lot of volume from families with kids," Riggs said. "How do we get them back?"
Who is getting hit hardest? Full-service dining, which experienced 70 percent of that decline in restaurant visits. Given families' importance to the restaurant sales landscape—they represent 20 percent of all sales, after all—that decline in full-service visits by families goes a long way toward explaining why casual dining has struggled so much.
Some of the decline can be explained by demographic trends. The number of women entering the workforce has been slowly decreasing since 1999—there are more stay-at-home dads, too. When there are parents at home, there is less reason for families to eat at restaurants. "There's not as much demand for convenience as there once was," Riggs said. Economic factors also play a role, as explained by the steep decline during the recession.
But that can't explain everything—the lost visits has been too steep. The decline in visits by families spans all dayparts—but particularly dinner—and includes both high and low-income families.
Families are obviously finding other sources. Grocery stores have beefed up their prepared food offerings while retailers such as Ikea and Costco have substantial dining options. And families may simply have grown accustomed to dining at home since the recession. "The competition is no longer the restaurant down the street," Riggs said. "It's now become the home."
Families are drifting away from full-service dining because of value and environment. Full-service is less of a value to families. This is particularly true as kids get older. According to Riggs, 6 percent of kids ages 2-5 order from the regular menu. But 22 percent of kids 6-10 order from the regular menu, and 43 percent of those 11-12 order from the regular menu.
That gets expensive, particularly at a full-service restaurant. "They're not going to go to a full-service restaurant and pay $12 to $15 for an entree," Riggs said. She suggested that chains start offering big-kid menus with larger portion sizes that are priced lower than the regular menu, and have smaller portion sizes that are nevertheless larger than what is found on the kids menu.
Time is another factor—a full-service meal takes longer. Riggs said that full-service concepts should do a better job of making families feel welcome. "There are tactics that can attract families back into restaurants," Riggs said. "Value components. Kid-friendly environment. Fast and attentive service. Make them feel like you want them in their restaurant.
"Coloring books and crayons aren't going to do it."