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Family/Midscale Restaurants - US - November 2011

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

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Table of contents

  1. 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
                                                                                                                                            • Email
                                                                                                                                              • 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

                                                                                                                                                                                    Companies Covered

                                                                                                                                                                                    • 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

                                                                                                                                                                                    Family/Midscale Restaurants - US - November 2011

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