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Fine Dining - US - March 2010

The restaurant industry as a whole is in a bind. A global recession has patrons eating out less and spending less when they do go out. Fine dining, as a deeper-pocket experience, has been especially hard hit. Many establishments have had to shutter their doors and others are seeing steep revenue declines. This has changed the face of fine dining in many ways. Restaurants are taking extra, previously unthinkable, steps in order to lure in customers—welcoming any and all customers and offering price incentives.

This report offers insights and guidance that will help restaurateurs wade through this tough time and work toward the future, including:

  • How the current economy is impacting where fine diners are cutting back
  • What demographics are the most important to consider, and how to woo them distinctly
  • What pricing promotions work best, including specially priced menus, prix-fixe and wine discounting
  • Ways to give special treatment to reward regulars and recognize the needs of wealthier patrons
  • How to use the slow time to an advantage, through hiring, training and upgrades
  • Why technology has become an essential tool and how to best utilize the various facets to reach out to customers and improve restaurant operations
  • What menu items and cuisine types are working best, and what trends should be followed

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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
              • Abbreviations and terms
                • Abbreviations
                  • Terms
                  • Executive Summary

                    • Market size data
                      • Restaurant business struggles to regain and maintain balance
                        • Declines in domestic and international tourism hurt
                          • Fine-dining menu prices do not reflect decline in food costs
                            • Fine dining suffers from fewer customers, lower spending
                              • The largest chains show across-the-board slippage
                                • Chains are rethinking expansion; independents are moving down
                                  • Chains are expanding price options to bring back customers
                                    • Comfort foods, simple preparations make fine dining approachable
                                      • Bar menus have become vital sources of revenue
                                        • Restaurants complement wine lists with new cocktails
                                          • Fine-dining operations are slowly embracing new media
                                          • Insights and Opportunities

                                              • Is the price right?
                                                • Find the “soft” spots
                                                  • Rule out nothing
                                                    • Stay for dinner, or not
                                                      • Learn the new media
                                                        • Celebrity sightings
                                                          • Educate me
                                                            • Around the world
                                                              • The guest really is always right
                                                              • Inspire Insights

                                                                  • Inspire Trend: Carnivore, Herbivore…Locavore
                                                                    • What it’s about
                                                                      • Where’s this from?
                                                                        • Figure 1: Menu items fine diners want to see more of, December 2009
                                                                      • On the Menu
                                                                        • Implications
                                                                          • Inspire Trend: Premiumization and Indulgence
                                                                            • What it’s about
                                                                              • A down economy forces consumers to prioritize
                                                                                • Implications
                                                                                • Market Size and Forecast

                                                                                  • Fine dining segment falls flat as consumers cut back on big expenditures
                                                                                    • Figure 2: U.S. Fine dining sales, at current prices, 2004-14
                                                                                    • Figure 3: U.S. Fine dining sales, at inflation-adjusted prices, 2004-14
                                                                                • Competitive Context

                                                                                  • Many cooking more at home and eating out less
                                                                                    • Figure 4: Strategies for dealing with recessionary pressures, by HH income, October 2009
                                                                                    • Figure 5: Drivers of cooking enthusiasm, by casual and serious cooking enthusiasts, June 2008
                                                                                • Market Drivers

                                                                                    • Disposable income continues to grow yet many saving more
                                                                                      • Figure 6: Nominal disposable personal income and savings rate, Q4 2007-Q4 2009
                                                                                      • Figure 7: Strategies for dealing with recessionary pressures, 2008 and 2009
                                                                                    • Skyrocketing unemployment and underemployment drives down discretionary spending
                                                                                      • Figure 8: U.S. unemployment and underemployment rate, January 2007-February 2010
                                                                                    • Drop in consumer confidence drives down sales at restaurants
                                                                                      • Figure 9: Consumer Sentiment Index, January 2007-February 2010
                                                                                    • Some may be avoiding restaurants to avoid temptation
                                                                                      • Figure 10: Trended nationwide (states, DC, and territories) incidence of overweight and obesity, 1995-2007
                                                                                      • Figure 11: Perception of weight relative to height, by age, January 2009
                                                                                    • Industry struggles to achieve stability but many are hopeful it’s getting better
                                                                                      • Figure 12: Restaurant Performance Index, January 2009-January 2010
                                                                                  • Restaurant Analysis: Ruth’s Chris Steak House

                                                                                    • Concept overview
                                                                                      • Performance summary
                                                                                        • Figure 13: Ruth’s Chris Steak House same-store sales growth trends, 2004-09
                                                                                      • On the menu
                                                                                        • Figure 14: Ruth’s Chris Steak House dinner menu component analysis, Q4 2009
                                                                                      • Menu promotions
                                                                                      • Restaurant Analysis: McCormick & Schmick’s

                                                                                        • Concept overview
                                                                                          • Performance summary
                                                                                            • Figure 15: McCormick & Schmick’s same-store sales growth trends, 2004-09
                                                                                          • On the menu
                                                                                            • Figure 16: McCormick & Schmick’s sample “10 Under $10” menu
                                                                                            • Figure 17: McCormick & Schmick’s dinner menu component analysis, Q4 2009
                                                                                          • Menu promotions
                                                                                          • Restaurant Analysis: Morton’s

                                                                                            • Concept overview
                                                                                              • Performance summary
                                                                                                • Figure 18: Morton’s systemwide same-store sales and average-check growth trends, 2004-09
                                                                                              • On the menu
                                                                                                • Figure 19: Morton’s dinner menu component analysis, Q4 2009
                                                                                              • Menu promotions
                                                                                                • Figure 20: Morton’s bar menu, Q4 2009
                                                                                                • Figure 21: Morton’s Signature Three-Course Menu, Q1 2010
                                                                                            • Restaurant Analysis: Roy’s

                                                                                              • Concept overview
                                                                                                • On the menu
                                                                                                  • Figure 22: Roy’s dinner menu component analysis, Q4 2009
                                                                                                • Menu promotions
                                                                                                  • Figure 23: Roy’s winter fusion menu, Q1 2010
                                                                                              • Restaurant Analysis: The Capital Grille

                                                                                                • Concept overview
                                                                                                  • Performance summary
                                                                                                    • Figure 24: The Capital Grille’s systemwide same-store sales growth, 2005-09
                                                                                                    • Figure 25: Darden Restaurant Brands’ check averages and same-store sales performance during the quarter ended November 29, 2009
                                                                                                  • On the menu
                                                                                                    • Menu promotions
                                                                                                      • Figure 26: The Capital Grille Comfort Foods with a Gourmet Twist menu, Q1 2010
                                                                                                  • Restaurant Brand Qualities

                                                                                                    • A crisis of confidence in fine dining
                                                                                                      • Does fine dining still have a place?
                                                                                                        • What becomes a legend?
                                                                                                          • Figure 27: Top-grossing independent restaurants, 2008
                                                                                                      • Advertising and Promotion

                                                                                                          • Face to Facebook
                                                                                                            • Other media
                                                                                                              • High steaks and stocks
                                                                                                                • Figure 28: Smith & Wollensky “Steak for Stock” print ad, February 2010
                                                                                                                • Figure 29: The Capital Grille “Lobster and Mac & Cheese” print ad, 2009
                                                                                                              • Analysis of commercials
                                                                                                                • Figure 30: Ruth’s Chris Steak House television ad, 2009
                                                                                                                • Figure 31: Melting Pot television ad, 2009
                                                                                                                • Figure 32: McCormick & Schmick’s television ad, 2009
                                                                                                            • Innovation and Innovators

                                                                                                              • Key points
                                                                                                                • Comfortable surroundings and comfort foods
                                                                                                                  • Lower prices for high-end restaurants
                                                                                                                    • Figure 33: Frequency, and incidence of ever going to a fine-dining restaurant, by age, December 2009
                                                                                                                    • Figure 34: Fine-dining restaurant decision influencer: price proximity and incentives, by HH income, December 2009
                                                                                                                    • Figure 35: Top 10 entrées included on fine-dining restaurant menus, Q4 2007-Q4 2009
                                                                                                                    • Figure 36: Average price for entrées on fine-dining menus, Q4 2007-Q4 2009
                                                                                                                    • Figure 37: Average price for entrées, by restaurant segment, Q4 2007-Q4 2009
                                                                                                                  • The language of food
                                                                                                                    • Figure 38: Top 10 ingredient marketing claims on fine-dining menus, Q4 2007-Q4 2009
                                                                                                                  • A matter of style
                                                                                                                    • Figure 39: “Important” facets of the ideal fine dining experience, by age, December 2009
                                                                                                                  • Burgers make it big
                                                                                                                    • On the house
                                                                                                                      • Liquid assets
                                                                                                                          • Figure 40: Top 10 beverage types at fine-dining restaurants, Q4 2009
                                                                                                                      • Restaurant Usage

                                                                                                                        • Key points
                                                                                                                          • One in three have not gone in last year; young adults may be key target
                                                                                                                              • Figure 41: Frequency, and incidence of ever going to a fine-dining restaurant, by age, December 2009
                                                                                                                            • Opportunity to increase frequency among lower income groups
                                                                                                                              • Figure 42: Frequency, and incidence of ever going to a fine-dining restaurant, by HH income, December 2009
                                                                                                                          • Fine Dining Spending Patterns

                                                                                                                            • Key point
                                                                                                                              • Spending per person down; many dining less often, in larger parties
                                                                                                                                • Figure 43: Fine dining mean restaurant spending, per party, per person, by HH income, July 2008, January 2009 and December 2009
                                                                                                                              • Over-45s more likely to continue spending $30+ per person
                                                                                                                                • Figure 44: Fine dining mean restaurant spending, per party, per person, by age, July 2008, January 2009 and December 2009
                                                                                                                            • Beverage Ordering Behavior

                                                                                                                              • Key point
                                                                                                                                • Wine and spirits play a key role in spend above $100 per visit
                                                                                                                                  • Figure 45: Beverages typically ordered off the menu when fine dining, by last bill total, December 2009
                                                                                                                                • Affluents much more likely to indulge in alcohol when dining
                                                                                                                                  • Figure 46: Items typically ordered off the menu when fine dining, by HH income, December 2009
                                                                                                                              • Meal Part Analysis

                                                                                                                                • Key points
                                                                                                                                  • Consistent with the health and wellness trend, most prefer salad appetizers
                                                                                                                                    • Figure 47: Fine dining last dining occasion appetizer order, by HH income, December 2009
                                                                                                                                  • Young adults much more likely to prefer fried appetizers
                                                                                                                                    • Figure 48: Fine dining last dining occasion appetizer order, by age, December 2009
                                                                                                                                  • Older adults somewhat more likely to prefer seafood
                                                                                                                                    • Figure 49: Fine dining last dining occasion entrée order, by age, December 2009
                                                                                                                                  • Older guests tend to avoid dessert, but may enjoy an exotic fruit dish
                                                                                                                                    • Figure 50: Fine dining last dining occasion entrée order, by age, December 2009
                                                                                                                                • Important Facets of the Ideal Fine Dining Experience

                                                                                                                                  • Key points
                                                                                                                                    • Food quality, relaxing atmosphere, presentation and knowledgeable staff key satisfaction drivers
                                                                                                                                        • Figure 51: “Important” facets of the ideal fine dining experience, July 2008, January 2009 and December 2009
                                                                                                                                      • Food and menu attributes
                                                                                                                                        • Figure 52: “Important” facets of the ideal fine dining experience, food and menu attributes, by age, December 2009
                                                                                                                                        • Figure 53: “Important” facets of the ideal fine dining experience, effect of wait staff, by age, December 2009
                                                                                                                                      • Young adults more likely to prefer formal setting
                                                                                                                                        • Figure 54: “Important” facets of the ideal fine dining experience, effect of atmosphere, by age, December 2009
                                                                                                                                    • Fine-dining restaurant Decision Influencers

                                                                                                                                      • Key points
                                                                                                                                        • Recommendations still key driver but price becoming more important
                                                                                                                                          • Figure 55: Fine-dining restaurant decision influencers, July 2008, January 2009 and December 2009
                                                                                                                                        • Reviews, recommendations, and awards key drivers among affluents
                                                                                                                                          • Figure 56: Fine-dining restaurant decision influencers: reviews, recommendations and awards, by HH income, December 2009
                                                                                                                                        • Young adults somewhat more likely to be influenced by online reviews and blogs
                                                                                                                                          • Figure 57: Fine-dining restaurant decision influencers: reviews, recommendations and awards, by age, December 2009
                                                                                                                                        • Mature adults somewhat more likely to be driven by price and coupons
                                                                                                                                          • Figure 58: Fine-dining restaurant decision influencers: price, proximity and incentives, by age, December 2009
                                                                                                                                        • Affluents somewhat more likely to be influenced by online media
                                                                                                                                          • Figure 59: Fine-dining restaurant decision influencers: advertisements and exposure, by HH income, December 2009
                                                                                                                                      • What Menu Items Fine Diners Want to See More Of

                                                                                                                                        • Key points
                                                                                                                                          • Many want more comfort foods as well as shareable and sustainable items
                                                                                                                                              • Figure 60: Menu items fine diners want to see more of, by gender, December 2009
                                                                                                                                          • Cuisines Consumers Order Most

                                                                                                                                            • Key points
                                                                                                                                              • American, Italian, Mexican Asian and BBQ most popular cuisines
                                                                                                                                                  • Figure 61: Cuisines fine diners order most, by age, December 2009
                                                                                                                                              • Cuisines Consumers Want to See More Of

                                                                                                                                                • Key point
                                                                                                                                                  • Ethnic options will be more common in the future
                                                                                                                                                      • Figure 62: Cuisines fine diners want to see more of, by age, December 2009
                                                                                                                                                    • Affluents somewhat less likely to want more ethnic options
                                                                                                                                                        • Figure 63: Cuisines fine diners want to see more of, by HH income, December 2009
                                                                                                                                                    • Custom Consumer Groups

                                                                                                                                                      • Affluents, married couples and dads dine frequently
                                                                                                                                                          • Figure 64: Frequency, and incidence of ever going to a fine-dining restaurant, by custom groups, December 2009
                                                                                                                                                        • Mature, educated affluents more likely to be big spenders
                                                                                                                                                            • Figure 65: Demographic profile of heavy, moderate and light spenders, December 2009
                                                                                                                                                          • Beef and seafood most often eaten by heavy spenders
                                                                                                                                                              • Figure 66: Dishes ordered, by amount spent at most recent visit to fine-dining establishment, December 2009
                                                                                                                                                            • Offer eco-friendly and comfort foods as well as cocktails to drive up average spending
                                                                                                                                                                • Figure 67: Menu items fine diners want to see more of, by amount spent at most recent visit to fine-dining establishment, December 2009
                                                                                                                                                            • Cluster Analysis

                                                                                                                                                                • Experiencers (29%)
                                                                                                                                                                  • Bargainers (34%)
                                                                                                                                                                    • Relaxers (37%)
                                                                                                                                                                      • Cluster characteristics
                                                                                                                                                                        • Figure 68: Fine dining clusters, December 2009
                                                                                                                                                                        • Figure 69: Frequency and incidence of ever going to a fine-dining restaurant, by fine dining clusters, December 2009
                                                                                                                                                                        • Figure 70: “Important” facets of the ideal fine dining experience, by fine dining clusters, December 2009
                                                                                                                                                                        • Figure 71: Fine-dining restaurant decision influencers, by fine dining clusters, December 2009
                                                                                                                                                                        • Figure 72: Menu items fine diners want to see more of, by fine dining clusters, December 2009
                                                                                                                                                                      • Cluster demographics cohesive
                                                                                                                                                                        • Figure 73: Fine dining clusters, by gender, December 2009
                                                                                                                                                                        • Figure 74: Fine dining clusters, by age, December 2009
                                                                                                                                                                        • Figure 75: Fine dining clusters, by household income, December 2009
                                                                                                                                                                        • Figure 76: Fine dining clusters, by race, December 2009
                                                                                                                                                                        • Figure 77: Fine dining clusters, by Hispanic origin, December 2009
                                                                                                                                                                      • Cluster methodology
                                                                                                                                                                      • Appendix: Additional Household Income Comparisons

                                                                                                                                                                          • Figure 78: “Important” facets of the ideal fine dining experience: food and menu attributes, by HH income, December 2009
                                                                                                                                                                          • Figure 79: “Important” facets of the ideal fine dining experience: effect of wait staff, by HH income, December 2009
                                                                                                                                                                          • Figure 80: “Important” facets of the ideal fine dining experience: restaurant qualities and perks, by HH income, December 2009
                                                                                                                                                                          • Figure 81: Fine-dining restaurant decision influencers: price, proximity and incentives, by HH income, December 2009
                                                                                                                                                                          • Figure 82: Cuisines fine diners order most, by HH income, December 2009
                                                                                                                                                                      • Appendix: Trade Associations

                                                                                                                                                                        Companies Covered

                                                                                                                                                                        • American Restaurant Group, Inc.
                                                                                                                                                                        • Applebee's International Inc.
                                                                                                                                                                        • Brinker International Inc.
                                                                                                                                                                        • Bugaboo USA
                                                                                                                                                                        • Bureau of Economic Analysis
                                                                                                                                                                        • Centers for Disease Control and Prevention
                                                                                                                                                                        • Clive's Fruit Farm
                                                                                                                                                                        • Darden Restaurants Inc.
                                                                                                                                                                        • Denny's Corporation
                                                                                                                                                                        • Facebook, Inc.
                                                                                                                                                                        • Food Distributors International
                                                                                                                                                                        • Four Seasons Hotels Inc.
                                                                                                                                                                        • Greenfield Online
                                                                                                                                                                        • 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)
                                                                                                                                                                        • Joe's Kitchen
                                                                                                                                                                        • McCormick & Schmick's Seafood Restaurants, Inc.
                                                                                                                                                                        • McDonald's U.S.A.
                                                                                                                                                                        • Morton's Restaurant Group, Inc.
                                                                                                                                                                        • National Council of Chain Restaurants (NCCR)
                                                                                                                                                                        • National Restaurant Association (NRA)
                                                                                                                                                                        • National Retail Federation (NRF)
                                                                                                                                                                        • O'Charley's Inc.
                                                                                                                                                                        • OSI Restaurant Partners, Inc.
                                                                                                                                                                        • P.F. Chang's China Bistro Inc.
                                                                                                                                                                        • Pizza Hut Inc
                                                                                                                                                                        • RARE Hospitality International, Inc.
                                                                                                                                                                        • Ruth's Chris Steak House, Inc.
                                                                                                                                                                        • Smith & Wollensky Restaurant Group, Inc.
                                                                                                                                                                        • The Conference Board
                                                                                                                                                                        • The New York Times Company
                                                                                                                                                                        • The Ritz-Carlton Hotel Company, L.L.C.
                                                                                                                                                                        • Travel Industry Association of America
                                                                                                                                                                        • Twitter, Inc.
                                                                                                                                                                        • U.S. Bureau of Labor Statistics
                                                                                                                                                                        • U.S. Bureau of the Census
                                                                                                                                                                        • U.S. Department of Agriculture
                                                                                                                                                                        • University of Michigan, The
                                                                                                                                                                        • US Department of Commerce
                                                                                                                                                                        • Wolfgang Puck Worldwide Inc.
                                                                                                                                                                        • Yahoo! Inc
                                                                                                                                                                        • YouTube, Inc.

                                                                                                                                                                        Fine Dining - US - March 2010

                                                                                                                                                                        £3,277.28 (Excl.Tax)