When choosing a restaurant to dine at, a loyal customer will most likely select quality above every other factor, according to a new report from The NPD Group.
In a report titled, “Defining Value Today: How Consumers Choose to Eat Out,” NPD restaurant industry analyst Bonnie Riggs wrote that quality should be viewed as a cost of entry. What’s more, Riggs wrote that restaurant operators must also deliver on customization and fresh ingredients as these factors stand out in the value equation.
Nearly 5,000 consumers participated in a study, which segmented into five groups based on attitudes about where they dined in the past three months. Customers who ate at fast food restaurants accounted for 46% of the sample; 17% chose casual dining; 16% chose fast casual; 11% chose midscale; and 10% chose convenience stores.
According to the report, more than 40% of consumers say they are loyal to their favorite restaurants and will eat there regardless of any promotions offered. After that group, 26% of respondents will change restaurants based on promotions; 19% seldom eat out; 9% go where it’s cheapest; and 4% didn’t choose any of the options.
“Consumers choosing where to dine is subject to some of the same pricing and deal pressures as other retail categories, but there remains large segments of the population for whom value is much more than the lowest prices," Riggs wrote. “Given this, operators will want to execute different marketing campaigns to appeal to a broad base, while remaining relevant to those seeking out the lowest price and best deals."
NPD first examined consumer value perceptions in 2009. This report reveals that by understanding the size and importance of key consumer groups, which concepts and promotions they seek out, restaurant operators and their supplier partners can develop strategies and programs that drive strong value perceptions while minimizing the impact of deal wear-out.
But while focusing on these factors, the report says, operators must not neglect their value offerings or rush to increase prices – results which could alienate customers.
According to the report, many “deals” are now considered everyday menu offerings with the exception of “two entrees and an appetizer for $20” -- which still resonates with the majority of consumers as a deal. Operators must introduce new promotions and menu items to attract customers and encourage repeat visits.