TNS: Restaurants Struggle to Keep Dieting Customers, Despite Increased Marketing; Consistent...

ATLANTA -- Subway Leads Pack Among Restaurants That Have Increased Business Among Dieters

Restaurant chains are losing the diet crowd, says a new survey by TNS, the world's largest custom research company. According to the study, which measured food consumption of dieting Americans at

This trend demonstrates that despite recent increased advertising and marketing pushes by many chains to tout low-carb and low-fat offerings, consumers are often not buying the message. This means that restaurants must respond with changes in menu offerings and communications with their customers to remain successful.

However, not all restaurants are failing to meet the needs of dieters. In fact, Subway led the pack among all restaurants that had increased business among dieters. The popular sandwich chain was also the only quick service restaurant (QSR) with high results in this category. In fact, 68 percent of respondents have either maintained or increased their visits to Subway during the past year. Applebee's also maintained or increased business among 59 percent of dieters. Rounding out the top five are Outback Steakhouse, Red Lobster and Olive Garden, indicating that these restaurants have responded effectively to the news of the 43 percent of Americans who claim to follow some type of diet program.

This finding highlights the fact that while most other chains have also launched or updated their menu options with healthy, low-carb or similar options on their menus, these five chains were the best at maintaining business among dieters. Clearly, the message is often not getting through, and restaurants are not capitalizing on their marketing investment.

Ken Athaide, Senior Vice President and leader of TNS Restaurant Practice, explains, "Food conscious Americans are seeking options, and with the carb-craze going full tilt, awareness of menu options is critical to keeping nutrition-conscious customers coming through the doors. Casual dining restaurants have an advantage, because they offer more than the traditional fast food items such as French fries, fried chicken, hamburgers and pizza that Americans are cutting back."

Continued Athaide, "These results validate the fact that Subway has created its dominance in this market through strategic positioning and marketing. Subway has become actively engaged in nutritional efforts - through its advertising, which consistently speaks to healthy food, its Web site which features healthy food, but and its sponsorship of the F.R.E.S.H. Steps Initiative, which is aimed at preventing and treating childhood obesity."

According to TNS Media Intelligence/CMR, the leading provider of strategic advertising and marketing information, Subway spent $280 million in advertising in 2003 making it the fourth largest ad spender of all restaurants included in the survey, just behind behemoths such as McDonald's, Wendy's and Burger King. Awareness of its low-carb menu options is the highest of all restaurants in the survey, despite the fact that Subway communicates a more general healthy-food message. One explanation may be that in addition to offering low fat and generally healthy menu items, Subway also offers Atkins(R) branded salads, which appeal to the low carb crowd. In this way, the restaurant appeals to a wide array of dieting consumers.

Applebee's, successful in the casual dining sector, has also consistently promoted its association with Weight Watchers(TM). Among the casual dining restaurants in the survey, it spent the second most on advertising at $116 million, behind Pizza Hut. As a result, 38 percent of consumers following a diet program believe that Applebee's has a limited or wide selection of low-carb options, again demonstrating a nutritional food halo effect generated through consistent advertising messages.

Eat at restaurant  Aware of low-  Total Advertising
                     as often or more carb options,     Expenditure
                     than last year    if any             2003(a)
                                                        (Millions)
------------------ ----------------- -------------- -----------------
Subway                      68%            70%              280
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Applebee's                  59             43               116
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Red Lobster                 55             32                86
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Outback Steakhouse          55             32                71
------------------ ----------------- -------------- -----------------
Olive Garden                53             36                89
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(a) Source: TNS Media Intelligence/CMR

Diet & Food Products Advertising Spend Trends

In 2003, the eighteen national restaurants included in the survey spent a total of $3.14 billion, according to TNS Media Intelligence/CMR. The restaurants in this survey that spent the most on advertising in 2003 were McDonald's ($673 million), Wendy's ($329 million), and Burger King ($305 million).

About The Study

The nationwide study was conducted via Internet-based interviews among a representative sample of 1,045 adult members of the TNS NFO Access Panel between June 11 and 16, 2004.

About TNS

TNS is one of the world's leading providers of market information. The company delivers strategic market measurement, analysis, insight and advice to many of the world's largest organizations and most recognized brands. TNS's research helps its clients better understand the needs and wants of their customers, and its capabilities span market segmentation, advertising and communications, new product development, brand performance and stakeholder management. The company is also one of the leading providers of social and political polling. From its global network that spans 70 countries who together conduct research in more than 110 countries, TNS allows for local expertise and knowledge to be combined together with internationally consistent information and analysis.

TNS is listed on the London Stock Exchange (TNN) and is a trade mark of Taylor Nelson Sofres plc. Further information can be found on http://www.tns-global.com.