Survey: Dining Out Is Up, Spending Is Down

To our readers: We usually don’t reprint press releases in their entirety, but the statistics in this one seemed too juicy to pass up.

Diners to Restaurants: “Please, Sir, We Want Some More…For Less”
Average Spending Per Meal Could Fall by 20%;
Key Sentiment Shifts Are Seen Since Q1 Poll

LAS VEGAS, NV — November 9, 2009 — Although economists may be reporting an end to the recession, the news has not reached restaurant customers, according to a new survey released today by AlixPartners LLP, the global business advisory firm. Following a study released in March 2009, AlixPartners recently surveyed 1,000 consumers about their current dining habits and expectations for future spending in this sector. The study, released today at the 2009 Restaurant Finance & Development Conference, found that while most consumers expected they will eat out as frequently in the coming year as they have in the past 12 months, the amount they expect to spend – an average of $11.49 per meal – was almost 20% less than the average spending per meal reported in the study released earlier this year.

The results showed that while Americans do not want – or do not have time – to cook for themselves, they are not looking for luxury dining out. While the percentage of people dining out at least weekly rose to 63%, up from 52% in AlixPartners’ March survey, the average number of monthly visits to Fine Dining establishments dropped by 36%.

“While food quality today remains top of mind for the consumer, the core driver for diners continues to be value, value, value,” said Andy Eversbusch, a managing director at AlixPartners and head of the firm’s Food Service Practice. “That determines how often people eat out, and where they eat out. Further, this survey suggests that while the industry continues to rely heavily on special discounts to drive traffic, it remains unclear whether this strategy will provide a sustained positive impact.”

“Customers have been trained to take specials for granted,” said Adam Werner, a director in the Food Service Practice at AlixPartners, and one of the authors of the study. “They have recalibrated their spending expectations based on the now-ubiquitous $5 sandwich and the $10 meal, and restaurants that aren’t marching in the promotions parade risk being left behind.”

According to Adam Fless, also an AlixPartners director and study co-author, “From these findings and our own experience in the field, we’re seeing that restaurants are going to need to do a very delicate balancing act for the foreseeable future, requiring a long-range alignment of kitchen costs and dining experience. If they are not able to re-engineer their menus to offer exceptional value, they will continue to struggle. And if they are not able to manage their execution in a way that keeps their margins healthy, survival will be a challenge.”

Fless also warned that attempts to arrive at quick fixes either by cutting margins to unsustainable levels, or by sacrificing food quality, often backfire. “A talented chef can make good food, and an owner can cut costs,” he said. “But only restaurateurs who can do both in a sustainable way, will have a secure future.”

The survey asked a representative sample of adults age 18 and above about their current and planned frequency and expenditure on dining out, as well as their preferred type of restaurant and key criteria in restaurant selection. The results include breakdowns by gender, region and income level. Other findings include:

• 63% dined out at least weekly over the last twelve months, 11% more than in AlixPartners’ Q1 survey. In spite of the increased visits, same store revenue continues to remain flat or declining. Fine Dining suffered the biggest reported drop in overall visits per month over last year.
• Value is still most often cited by consumers as the reason to try new restaurants; promotions are far more important than previous survey, however their overall positive effects on revenue remain unclear.
• Consumer preference continues to be driven not only by price, but by overall food quality which was again cited as the most important factor in selecting a restaurant.
• Going forward, consumers plan to spend less in the next 12 months than they do currently.
• Expected average spend in the next 12 months is projected to drop 3% as consumers shift more to meals under $5.
• The study also found significant differences between the respondents along the lines of gender, annual income and geographic region.

6 thoughts on “Survey: Dining Out Is Up, Spending Is Down

  1. Why am I not surprised? Unfortunately for a lot of folks, McDonald’s and Taco Hell now count as “eating out”… And they think they’re saving money at Outback or Applebee’s when they don’t realize how many good local restaurants offer better food for the same prices or even less. I know the economy’s still tough on so many people, but I hope more locals at least keep our money in the community by supporting local restaurants and taking advantage of the many deals offered all over town.

  2. You think that’s bad, try the wines by the glass available at most restaurants now. Prices reduced moderately, quality severely. “Let’s higher a Master Sommelier to find incredibly cheep wines that have a trace of quality of the good stuff and sell them for the same price…. ” I can’t tell you how many times I order a glass of recommended wine , have a sip and walk away thinking I’ve been ripped a new one .

  3. no self-respecting MS would recommend a low quality-overpriced wine…it goes against everything they believe in…and if you suspicious of a recommendation, ask for taste first so you can make your own decision….

  4. be careful george, ELV might use you poor grammar and spelling as a letter of the week, to try to cover the facts when is is called out on something

  5. Las Vegas is the world’s premiere gambling destination, synonymous with non-stop casino action, luxurious hotels, championship sporting events, world-class shopping, celebrated restaurants and some of the greatest entertainment in the world. In fact there is so much to do, eat and see, it can easily overwhelm any visitor to the city.

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