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- Family/Midscale Restaurants - US - November 2011
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Family restaurants are typically identified as breakfast destinations. Therefore, it’s no surprise that Mintel’s exclusive consumer research identifies breakfast as the market’s sweet spot in terms of usage (55%), compared to 40% for lunch and 43% for dinner.
Succeeding at the breakfast daypart isn’t enough to sustain sales when the morning meal remains the least likely occasion for restaurant dining, especially under a stuttering economy. To counteract tepid consumer spending and increased competition from other foodservice operators, family midscale restaurants have resorted to deep discounting to attract diners—a response that may be a misstep, as traffic growth has not been able to offset lower check averages.
In this report, Mintel delves deeper into this hypothesis with analysis of sales trends, leading family restaurant brands, marketing strategies, menu innovation and pricing trends. These topics are supported by proprietary research featuring consumer attitudes and behaviors toward the market, including:
- Usage of family midscale restaurants by daypart and frequency
- Discovery of widely used family restaurant chains and usage by daypart
- Dollars spent on most recent visit to a family restaurant, as well as changes in spending patterns
- Factors that influence family restaurant-goers’ decisions on where to dine, and how consumers rate restaurant performance on these attributes
- Perceptions of value, health and service at family restaurants
- Honed analysis of the attitudes and behaviors of family restaurants’ most frequent user groups
Scope and Themes
What you need to know
Definition
Data sources
Mintel Menu Insights
Consumer survey data
Advertising creative
Sales data
Abbreviations and terms
Abbreviations
Terms
Executive Summary
Family midscale restaurant market overview
Consumer confidence remains shaken
Family restaurants attract young users
The family factor
Competition for family midscale restaurants
Leading family midscale restaurants brand performance
Breaking down the family midscale menu
Family midscale restaurant usage
Spending habits of the family midscale user
Value and likable menu items are most influential selection factors
Family restaurants get high performance rating for likable menu items
Future demands for the family midscale menu
Success in service; value and health perceptions lag
Insights and Opportunities
Sustainable approach to value
Adding value through promotional efforts
Figure 1: Valuable marketing efforts of fast casual restaurant chains, by gender and age, June 2011
Adding value through healthy innovation
Adding value through express family dining
Inspire Insights
Trend: New Fundamentalism
Trend: A Simple Balance for Health
Market Size and Forecast
Key points
Family restaurants turn to value pricing to increase traffic
Figure 2: Total U.S. systemwide sales of family midscale restaurants, at current prices, 2006-16
Figure 3: Total U.S. systemwide sales of family midscale restaurants, at inflation-adjusted prices, 2006-16
Fan chart forecast
Figure 4: Fan chart of market value for family midscale restaurants, at current prices, 2006-16
Market Drivers
Lackluster consumer confidence supports instability in restaurant industry
Figure 5: Consumer Sentiment Index, March 2007–September 2011
Figure 6: Real personal disposable income, January 2007–August 2011
Figure 7: Median household income in inflation-adjusted dollars, 2000-10
Figure 8: Unemployment and underemployment rates, January 2007–September 2011
Figure 9: NRA performance indices, January 2009-August 2011
Figure 10: Adjusted foodservice and drinking places sales, January 2008–August 2011
Implication for family midscale restaurant market
Young age groups drawn to family restaurants
Figure 11: Family midscale usage, by age, June 2011
Figure 12: Population, by age, 2006-16
Implication for family midscale restaurant market
The family dynamic
Figure 13: Family midscale usage, by presence of children, June 2011
Figure 14: Households, by presence of children, 1999-2009
Implication for family midscale restaurant market
Competitive Context
Discounting is a short-term fix to a long-term problem
Figure 15: Average price of menu items, by restaurant segment, Q2 2008-Q2 2011
Leading Family Midscale Restaurant Chains
Key points
Leading family restaurant chains weather the recessionary storm
Figure 16: U.S. systemwide sales of leading family midscale chains, 2008 and 2010
Restaurant Analysis—IHOP
Overview
Slow sales growth
Figure 17: IHOP systemwide comparable restaurant sales growth, percentage increase, 2006-Q2 2011
IHOP brand strategies
Marketing
Figure 18: IHOP email alert, August 2011
Menu
Figure 19: IHOP TV ad, New Pair, February-May 2011
Figure 20: IHOP menu, Q3 2011
Brand extension
The IHOP customer
Figure 21: IHOP usage, by race/ethnicity, February 2010-March 2011
Figure 22: IHOP usage, by frequency groups, June 2011
Restaurant Analysis—Denny’s
Overview
Attempting to move out of troubled water
Figure 23: Denny’s systemwide comparable restaurant* sales growth, percentage increase, 2006-Q2 2011
Denny’s brand strategies
Marketing
Figure 24: Denny’s promotion, July 2011
Menu
Figure 25: Denny’s menu, Q3 2011
Brand expansion
The Denny’s customer
Figure 26: Denny’s usage, by select demographics, February 2010-March 2011
Figure 27: Denny’s usage, by frequency groups, June 2011
Restaurant Analysis—Cracker Barrel
Overview
Sales remain flat
Figure 28: Cracker Barrel systemwide comparable restaurant sales growth, percentage increase, 2006-11
Cracker Barrel brand strategies
Menu
Figure 29: Cracker Barrel menu, Q3 2011
The Cracker Barrel customer
Figure 30: Cracker Barrel usage, by select demographics, February 2010-March 2011
Figure 31: Cracker Barrel usage, by frequency groups, June 2011
Restaurant Analysis—Golden Corral
Overview
Solid growth in 2010
Golden Corral brand strategies
Figure 32: Golden Corral menu, Q3 2011
The Golden Corral customer
Figure 33: Golden Corral usage, by select demographics, February 2010-March 2011
Figure 34: Golden Corral usage, by frequency groups, June 2011
Menu Insights Analysis: The Family Midscale Menu
Key points
Pancake and cheeseburger innovation offers unique flavor profiles
Figure 35: Top 10 food items at family midscale restaurants, by incidence, Q2 2008-Q2 2011
Steak commands highest price point at family restaurants
Figure 36: Top 10 food items at family midscale restaurants, by incidence and price, Q2 2008-Q2 2011
Menu Insights Analysis: The Beverage Menu
Key points
Shift away from soda; growth in lager
Figure 37: Top 10 beverages at family midscale restaurants, by incidence, Q2 2008-Q2 2011
Highest price increases for coffee and pale lager
Figure 38: Top 10 beverages at family midscale restaurants, by incidence and price, Q2 2008-Q2 2011
Menu Insights Analysis: The Kids’ Menu
Key points
Family restaurants are a leader in kids’ menu offerings
Figure 39: Incidence of kids’ menu items, by restaurant segment, Q2 2008-Q2 2011
Chicken fingers are the prevalent kids’ meal item at family restaurants
Figure 40: Top 10 kids’ menu food items at family midscale restaurants, by incidence, Q2 2008-Q2 2011
Chicken fingers are the most expensive kids’ menu item
Figure 41: Top 10 kids’ menu food items at family midscale restaurants, by incidence and price, Q2 2008-Q2 2011
Marketing Strategies
Overview
Promotional pricing strategies
Limited-time discounts
Figure 42: Cracker Barrel TV ad, Summer Spark, May-July 2011
Figure 43: Crackerbarrel.com monthly visits, August 2010-July 2011
Value menu pricing
Figure 44: Denny’s TV ad, Time for Anything, May 2011
“All you can eat” promotions
Figure 45: IHOP TV ad, We Know You Know, January-March 2011
Figure 46: IHOP Facebook ad, October 2011
Promoting menu items
Television
Figure 47: Big Boy TV ad, Savory Ingredients, August-October 2011
Figure 48: Denny’s TV ad, Which Came First, March-May 2011
Figure 49: IHOP email alert, August 2011
Coupons
Figure 50: Big Boy coupon offers, September-October 2011
Social Media
Mentions in the press
Figure 51: Dennys.com monthly visits, August 2010-July 2011
Family Midscale Restaurant Usage
Key points
Family midscale more likely to be used for breakfast
Figure 52: Family midscale daypart usage, by age, June 2011
Family midscale has stronger appeal to families
Figure 53: Family midscale daypart usage, by presence of children, June 2011
Family midscale restaurants not frequently visited
Figure 54: Family midscale usage frequency, by age, June 2011
Families are high frequency users
Figure 55: Family midscale usage frequency, by presence of children, June 2011
Family Midscale Restaurant Brand Usage
Key point
IHOP has the strongest reach of family midscale brands
Figure 56: Family midscale brand usage, June 2011
Frequency of use by brand
Figure 57: Family midscale brand monthly visits, June 2011
Breakfast usage by brand
Figure 58: Family midscale breakfast usage, by age, June 2011
Figure 59: Family midscale breakfast usage, by presence of children, June 2011
Lunch usage by brand
Figure 60: Family midscale lunch usage, by age, June 2011
Figure 61: Family midscale lunch usage, by presence of children, June 2011
Dinner usage by brand
Figure 62: Family midscale dinner usage, by age, June 2011
Figure 63: Family midscale dinner usage, by presence of children, June 2011
Spending Habits at Family Midscale Restaurants
Key points
Diners spend an average of $11.32 per person at family restaurants
Figure 64: Average check and party size, July 2010 and June 2011
Diners 25-44 have highest check averages, yet those 45-64 yield higher per-person spend
Figure 65: Average check and party size, by age, June 2011
Highest per-person spend comes from consumers with modest incomes
Figure 66: Average check and party size, by household income, June 2011
Large families spend less per person at family restaurants
Figure 67: Average check and party size, by presence of children, June 2011
Changes in spending at family midscale
Figure 68: Changes in spending at family midscale, by gender, June 2010
Younger users are spending more
Figure 69: Changes in spending at family midscale, by age, June 2010
Budgetary reasons remain leading deterrent to spending
Figure 70: Reasons for spending less at family midscale, by gender, June 2011
Family Midscale Selection Factors
Key points
Value and appealing menu items highly influence restaurant selection
Figure 71: Important attributes for selecting a family midscale restaurant, by gender, June 2011
Older family restaurant users value the restaurant experience
Figure 72: Important attributes for selecting a family midscale restaurant, by age, June 2011
Families need menus that offer something for everybody
Figure 73: Important attributes for selecting a family midscale restaurant, by presence of children, June 2011
Consumer Ratings of Family Midscale Restaurants
Key points
Family restaurants receive highest rating for having likable menu items
Figure 74: Ratings of family midscale performance, June 2011
Older respondents give highest performance ratings
Figure 75: Ratings of family midscale performance, by age, June 2011
Less affluent give higher performance ratings for taste
Figure 76: Ratings of family midscale performance, by household income, June 2011
Performance ratings highest among households with two or more kids
Figure 77: Ratings of family midscale performance, by presence of children, June 2011
Consumer Demands for Family Midscale Restaurants
Key points
Healthy side dishes, small plates, and seafood offer platform for innovation
Figure 78: Future menu considerations at family midscale, by gender, June 2011
Younger diners looking for more variety at lunch and dinner
Figure 79: Future menu considerations at family midscale, by age, June 2011
Lower incomes want a variety of lunch and dinner options
Figure 80: Future menu considerations at family midscale, by household income, June 2011
Families want healthier kids’ meal options
Figure 81: Future menu considerations at family midscale, by presence of children, June 2011
Attitudes Toward Family Midscale Restaurants
Key points
Full-service experience is benefit of family-style dining
Figure 82: Attitudes toward family midscale experience, June 2011
Those who are younger than 45 visit family restaurants on the weekends
Figure 83: Attitudes toward family midscale experience, by age, June 2011
Healthy menu items could attract affluent diners
Figure 84: Attitudes toward family midscale experience, by household income, June 2011
Slow service could be a deterrent for weeknight family meals
Figure 85: Attitudes toward family midscale experience, by presence of children, June 2011
Light, Medium, and Heavy Usage
High frequency users spend less per person…
Figure 86: Average check and party size, by frequency groups, June 2011
… but they are spending more overall this year
Figure 87: Changes in spending at family midscale, by frequency group, June 2010
Frequent users appreciate the dine-in experience
Figure 88: Important attributes for selecting a family midscale restaurant, by frequency groups, June 2011
High frequency users more likely to give positive rating
Figure 89: Ratings of family midscale performance, by frequency groups, June 2011
Appease frequent users with greater variety of lunch and dinner options
Figure 90: Future menu considerations at family midscale, by frequency groups, June 2011
Need for healthy and light options to keep frequent users happy
Figure 91: Attitudes toward family midscale experience, by frequency group, June 2011
Appendix: Trade Associations
- Brinker International Inc.
- Bureau of Economic Analysis
- Food Distributors International
- Frisch's Restaurants, Inc.
- Groupon, Inc.
- International Food Service Executives Association (IFSEA)
- International Foodservice Distributors Association (IFDA)
- International Foodservice Manufacturers Association (IFMA)
- International Franchise Association (IFA)
- International Hotel and Restaurants Association (IH&RA)
- McDonald's U.S.A.
- National Council of Chain Restaurants (NCCR)
- National Restaurant Association (NRA)
- National Retail Federation (NRF)
- O'Charley's Inc.
- Pizza Hut Inc
- The Cheesecake Factory Incorporated
- U.S. Bureau of Labor Statistics
- University of Michigan, The
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