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Foodservice and Convenience - US - December 2009

Depressed consumer confidence continues to plague foodservice industries, as dining out is more frequently perceived as a luxury that can be cut back on. However, restaurants may be able to mitigate the damage of the recession by focusing on the “convenience segment,” those consumers who continue to spend on services like delivery or takeout as a more necessary part of their lifestyle. In this report, Mintel explores the preferences of this segment and how vendors are catering to their needs.

Analysis and insights offered include:

  • Which elements of convenience (e.g. speed of service, packaging) vendors are focusing on
  • How supermarkets and convenience stores compare to restaurants in the convenience market
  • How key demographics are being targeted by major chains
  • How mobile technology is taking convenience in ordering to the next level
  • Which demographics are key to the convenience segment
  • How important convenience factors are in restaurant selection
  • Which food options are more attractive to the convenience segment
  • Which points of differentiation, other than food quality, are most important to consumers in a rush

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Data sources
        • Sales data
          • Consumer survey data
            • Advertising creative
              • Abbreviations and terms
                • Abbreviations
                • Executive Summary

                  • Recession reduces discretionary spending but consumers still need convenience
                    • Restaurants focus on convenience to appeal to more frequent patrons
                      • Prepared food at supermarkets offers fresh meals at low price points
                        • Convenience stores draw less health-conscious consumers with low price points
                          • Television ads target consumers on the go
                            • Smartphones offer next level of convenience in vendor selection and ordering
                              • Convenience factors more important to under-45s and respondents with children
                                • Delivery/takeout market driven by under-35s and larger households
                                  • More frequent delivery/takeout users value accuracy of service and more options/customization
                                    • More frequent use of delivery/takeout is work-driven
                                    • Insights and Opportunities

                                      • Connecting foodservice with other convenience services
                                          • Figure 1: Usage of convenience services, by change in spending on takeout/delivery compared to last year, October 2009
                                        • Appealing to the under-35 demographic can boost delivery/takeout business
                                          • Hispanic population is prime target for delivery/takeout
                                              • Figure 2: Population, by race and Hispanic origin, 2004-14
                                          • Inspire Insights

                                              • Simplicity and Convenience
                                                • What's it about?
                                                  • A Simple Balance for Health
                                                    • What's it about?
                                                    • Competitive Context

                                                      • Recession drives consumers to spend more on food at home
                                                          • Figure 3: Share of at-home and away-from-home food spending, 2004-08
                                                        • Sales of pre-prepared meals stable but suffer from negative perception
                                                        • Restaurant Channel

                                                          • Restaurant industry sales still contracting as economy stabilizes
                                                            • Figure 4: Restaurant Performance Index, current situation, and expectations, May 2007-September 2009
                                                          • Consumers trade down to lower-priced concepts
                                                            • Figure 5: Change in spending at various types of foodservice vendors, October 2009
                                                          • Increasing convenience combats consumer reluctance to spend
                                                            • Mobile ordering
                                                              • Faster service
                                                                • Packaging
                                                                  • Targeting families
                                                                    • Extended hours
                                                                    • Supermarket Channel

                                                                      • Prepared food departments offer strong convenience value
                                                                        • Price points are critical to sales growth
                                                                          • Packaged promotions increase interest in existing offerings
                                                                            • Wide selection of offerings cater to a desire for customization
                                                                              • Despite choices, customers find solace in comfort food
                                                                                • Enhanced presentation places emphasis on freshness
                                                                                  • Drive-up windows increase convenience to compete with QSRs
                                                                                  • Convenience Store Channel

                                                                                    • Higher-margin foodservice revenues show impressive growth
                                                                                      • Figure 6: Total same-store sales of foodservice at convenience stores, at current prices, 2004-08
                                                                                    • Prepared foods aimed at less health-conscious consumers generate largest part of sales
                                                                                      • Figure 7: Breakdown of total sales of foodservice at convenience stores, 2008
                                                                                    • Convenient, inexpensive coffee draws customers and leads to additional purchases
                                                                                      • Improvement through technology
                                                                                        • Convenience stores’ price positioning may incite price wars
                                                                                        • Market Drivers

                                                                                          • Consumer confidence undermines willingness to spend at restaurants
                                                                                            • Figure 8: Consumer Sentiment Index, by quarter, 2001-09
                                                                                          • Recession favors convenience-minded segment as driver of sales growth
                                                                                            • Active lifestyles of under-35s are most demanding of convenience
                                                                                                • Figure 9: Reasons consumers eat out at casual restaurants, by age, July 2009
                                                                                              • Corporate cost cutting drives longer hours at work
                                                                                                • Children in the household increase need for convenience
                                                                                                    • Figure 10: Population, by age, 2005-15
                                                                                                • Television Advertising

                                                                                                  • Known to be convenient, quick-service restaurants focus on value
                                                                                                    • Figure 11: McDonald’s—Drink Offer, March 2009
                                                                                                  • Family and casual restaurants promote faster takeout and customization
                                                                                                    • Figure 12: Applebee’s—Carside To Go, May 2009
                                                                                                    • Figure 13: Denny’s—Build Your Own, November 2009
                                                                                                  • 7-Eleven places emphasis on the beverage
                                                                                                    • Figure 14: 7-Eleven—Coffee and Taquitos, January 2009
                                                                                                • Innovations and Innovators

                                                                                                  • Smartphones and social networking open new realms of possibility for convenience and marketing
                                                                                                    • Smartphone applications
                                                                                                      • Pizza chains pioneer ways to order
                                                                                                        • Enhancements to mobile ordering
                                                                                                          • Other ordering methods
                                                                                                          • Convenience Factors in Restaurant Selection

                                                                                                            • Under-45s more likely to cite convenience factors as important
                                                                                                              • Figure 15: Casual restaurant decision influencers, by age, October 2009
                                                                                                            • Children in the household makes convenience factors more important
                                                                                                              • Figure 16: Casual restaurant decision influencers, by presence of children in the household, October 2009
                                                                                                          • Delivery and Takeout Usage

                                                                                                            • Under-35s drive growth in delivery/takeout market
                                                                                                              • Figure 17: Change in spending on delivery or takeout, by age, October 2009
                                                                                                            • Higher spending by $100K+ group suggests segment is also driven by dual-income households
                                                                                                              • Figure 18: Change in spending on delivery or takeout, by HH income, July 2009
                                                                                                            • Larger households spending more on delivery/takeout
                                                                                                              • Figure 19: Change in spending on delivery or takeout, by household size, July 2009
                                                                                                            • Takeout/delivery segment substantial for sit-down restaurants, not just QSR
                                                                                                              • Figure 20: Ways to purchase food from casual restaurants, by age, July 2009
                                                                                                          • Attitudes of Consumers Spending More on Convenience

                                                                                                            • Accuracy of service more important among frequent takeout/delivery users
                                                                                                                • Figure 21: Considerations when in a rush, by change in spending on takeout/delivery compared to last year, October 2009
                                                                                                              • More meat options and bigger portions important for takeout/delivery
                                                                                                                  • Figure 22: Preferred food options, by change in spending on takeout/delivery compared to last year, October 2009
                                                                                                                • Takeout/delivery segment values customization, breadth of offerings, and convenience to the workplace
                                                                                                                    • Figure 23: Factors in selecting a restaurant for dinner, by change in spending on takeout/delivery compared to last year, October 2009
                                                                                                                  • Health-conscious brands may warrant premium prices for takeout/delivery segment
                                                                                                                      • Figure 24: Attitudes toward food and nutrition, by change in spending on takeout/delivery compared to last year, October 2009
                                                                                                                  • Cluster Analysis

                                                                                                                      • Customizers
                                                                                                                        • Websters
                                                                                                                          • Qualifiers
                                                                                                                            • Cluster characteristics
                                                                                                                              • Figure 25: Foodservice and convenience clusters, October 2009
                                                                                                                              • Figure 26: Casual restaurant decision influencers, by foodservice and convenience clusters, October 2009
                                                                                                                              • Figure 27: Change in spending at various types of foodservice vendors, by foodservice and convenience clusters, October 2009
                                                                                                                              • Figure 28: Reasons consumers eat out at casual restaurants, by foodservice and convenience clusters, October 2009
                                                                                                                            • Cluster demographics
                                                                                                                              • Figure 29: Foodservice and convenience clusters, by gender, October 2009
                                                                                                                              • Figure 30: Foodservice and convenience clusters, by age, October 2009
                                                                                                                              • Figure 31: Foodservice and convenience clusters, by HH income, October 2009
                                                                                                                              • Figure 32: Foodservice and convenience clusters, by race, October 2009
                                                                                                                              • Figure 33: Foodservice and convenience clusters, by Hispanic origin, October 2009
                                                                                                                            • Cluster methodology
                                                                                                                            • Appendix: Additional Consumer Tables

                                                                                                                                • Figure 34: Casual restaurant decision influencers, by gender, October 2009
                                                                                                                                • Figure 35: Casual restaurant decision influencers, by HH income, October 2009
                                                                                                                                • Figure 36: Change in spending at various types of foodservice vendors, by gender, October 2009
                                                                                                                                • Figure 37: Reasons consumers eat out at casual restaurants, by gender, October 2009
                                                                                                                                • Figure 38: Reasons consumers eat out at casual restaurants, by age, October 2009
                                                                                                                                • Figure 39: Reasons consumers eat out at casual restaurants, by HH income, October 2009
                                                                                                                            • Appendix: Trade Associations

                                                                                                                              Companies Covered

                                                                                                                              • Albertsons Inc.
                                                                                                                              • Buffalo Wild Wings Inc.
                                                                                                                              • Burger King Corporation
                                                                                                                              • Casey's General Stores Inc
                                                                                                                              • Cold Stone Creamery
                                                                                                                              • Domino's Pizza LLB
                                                                                                                              • Dunkin' Brands
                                                                                                                              • Facebook, Inc.
                                                                                                                              • Food Marketing Institute
                                                                                                                              • Greenfield Online
                                                                                                                              • In-N-Out Burgers, Inc.
                                                                                                                              • International Foodservice Distributors Association (IFDA)
                                                                                                                              • International Foodservice Manufacturers Association (IFMA)
                                                                                                                              • International Franchise Association (IFA)
                                                                                                                              • McDonald's Corporation
                                                                                                                              • National Council of Chain Restaurants (NCCR)
                                                                                                                              • National Nutritional Foods Association
                                                                                                                              • National Restaurant Association (NRA)
                                                                                                                              • National Retail Federation (NRF)
                                                                                                                              • Netflix, Inc.
                                                                                                                              • Organic Trade Association
                                                                                                                              • Panera Bread Company
                                                                                                                              • Peapod
                                                                                                                              • Pizza Hut Inc
                                                                                                                              • Research In Motion (USA)
                                                                                                                              • Sheetz, Inc
                                                                                                                              • Starbucks Corporation
                                                                                                                              • Thriftway
                                                                                                                              • TiVo Inc
                                                                                                                              • U.S. Bureau of Labor Statistics
                                                                                                                              • Wawa, Inc
                                                                                                                              • Weight Watchers International Inc.
                                                                                                                              • Winn-Dixie Stores

                                                                                                                              Foodservice and Convenience - US - December 2009

                                                                                                                              £3,199.84 (Excl.Tax)