Food-service franchisors looking to drive growth in the coming year should focus on two key demographics: young adults (ages 18 to 34) and health-conscious diners, according to a new report from Packaged Facts.
These groups are “sweet spots” for restaurants, says “U.S. Foodservice Landscape 2010: Restaurant Industry and Consumer Trends,” as reported by MediaPost. Some specifics: Customers 18 to 24 years old have more people in their [dining] party and spend more on a per-meal basis (25 percent higher than average). Healthy eaters and “tech-savvy” diners also spend more per visit and tend to have larger party sizes than the average.
Within the young adult group, Generation Y (age 25 to 34) with annual incomes above $50,000 hold the most promise for restaurateurs. They are the most frequent patrons of all types of restaurants, and also ranked highest in intentions to eat out or buy food from a restaurant in the next three months. They are more than twice as likely as the average consumer to say they go out to dinner “just to enjoy themselves.”
What attracts these desirable consumers to a restaurant? Novelty and environmental friendliness were both key ingredients, according to Packaged Facts. Other factors that will drive success for food service in the coming year:
o offering new menu items to attract consumers who are not already loyal to the brand;
o increasing frequency of visits among existing customers with targeted promotions (loyalty programs are especially popular among Gen Y and health-conscious consumers);
o “mix-and-match” promotions that pair low- and high-margin menu items;
o commitment to sustainability practices; and
o online or mobile ordering capabilities.
Overall, Packaged Facts’ outlook on the food-service industry is cautious. Grocery sales, up by 4 percent year-over-year as of February 2010, show that more consumers are still eating at home to save money, and Packaged Facts projects an overall 2 percent decline in restaurant sales this year, with a 2 percent increase in 2011. Sales at full-service restaurants are projected to decline 4 percent this year, then rise 1 percent in 2011; limited-service restaurant sales will decline 1 percent this year and rise 2 percent in 2011.
To grab some of that increase, food franchisors should focus on key young adult and health-conscious markets. Smart franchise companies are already making many of these moves. Promotions and new products have helped food-service franchise brands survive the recession, and using social media tools like Facebook has helped them attract young consumers.
Rieva Lesonsky is CEO of GrowBiz Media, a content and consulting company that helps entrepreneurs start and grow their businesses. Follow Rieva on Twitter at Twitter.com/Rieva. Visit SmallBizDaily.com to read more of Rieva’s insights on small business and to buy her newest book, Marketing 101: Quick Tips for Marketing Your Business.