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Fullservice Restaurant Trends - US - January 2017

2016 for FSRs (full service restaurants) was characterized by rising prices, same-store traffic decreases, competition from LSRs (limited service restaurants), and the bankruptcy of some high-profile restaurant groups. Despite these challenges, FSRs continue to shape what and even how consumers eat. The future may not be clear for many large FSR chains; however, focusing on the basics, such as great food and great service, and making meaningful changes, such as implementing a loyalty program, may help turn around declining or stagnant sales.

This report examines the following issues:

  • Consumers are visiting FSRs less often
  • Falling retail prices are hurting FSR sales
  • Deals may not be the ideal solution

This Report covers consumers’ attitudes and behaviors surrounding full service restaurants. Full service restaurants are defined by having a front of house staff (ie waiters, host, etc.). Family/midscale restaurants, casual dining restaurants, and fine dining restaurants all comprise the full service restaurant market.

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Consumers are visiting FSRs less often
            • Figure 1: Behavior changes – FSR visitation, October 2016
          • Falling retail prices are hurting FSR sales
            • Figure 2: Reasons for visiting FSRs less compared to one year ago, October 2016
          • Deals may not be the ideal solution
            • Figure 3: FSR visitation motivators, October 2016
          • The opportunities
            • The FSR market is still growing
              • Figure 4: Total US revenues and forecast of full service restaurants, at current prices, 2011-21
            • Loyalty programs can drive FSR visitation
              • Figure 5: Ideal FSR loyalty program, October 2016
            • A casual fine dining experience strips the segment of its exclusivity
              • Figure 6: FSR statement agreement, October 2016
            • What it means
            • The Market – What You Need to Know

              • Despite challenges, the FSR market is growing
                • FSRs face competition from all sides
                  • Falling retail prices are a major concern
                  • Market Size and Forecast

                    • FSRs experience steady revenue growth
                      • Figure 7: Total US revenues and forecast of full service restaurants, at current prices, 2011-21
                      • Figure 8: Total US revenues and forecast for full-service restaurants, at current prices, 2011-21
                  • Market Breakdown

                    • FSRs slowly lose market share
                      • Figure 9: Total US revenues and forecast for restaurants and other eating places, by segment, at current prices, 2016-21
                  • Market Perspective

                    • QSRs double down on value/convenience
                      • Figure 10: Reasons for visiting a QSR, February 2016
                    • New fast casuals pose a major threat to FSRs
                      • Grocerants redefine the dining and shopping experience
                        • Meal kits: a passing trend or serious competitor?
                        • Market Factors

                          • Gap between AH and AFH prices grows
                            • Follow the money
                              • Figure 11: Median household income, by age of householder, 2015
                              • Figure 12: Median household net worth, by age of householder, 2013
                            • Consumer sentiment is up; will consumers dine out more?
                              • Figure 13: Consumer sentiment index, January 2007 – November 2016
                              • Figure 14: Dining out predicted changes in behavior, September 2016
                          • Key Players – What You Need to Know

                            • Major midscales carry on while the rest of the segment falls behind
                              • Casual dining searches for answers
                                • Fine dining doesn’t take itself too seriously
                                • Midscale Restaurants

                                  • What’s working?
                                    • Midscales get an upgrade
                                      • Midscales get real
                                        • Figure 15: Midscale visitation motivators, June 2016
                                      • The big three midscales keep up with the competition
                                        • Figure 16: Restaurant visitation in the past 30 days, 2012-16
                                      • What’s struggling?
                                        • Midscales faltering
                                          • Figure 17: Restaurant visitation in the past 30 days, 2012-16
                                        • What’s next?
                                          • Seniors and kids
                                            • Figure 18: Midscale visitation motivators: senior menus, June 2016
                                            • Figure 19: Midscale visitation motivators: kids menus, June 2016
                                          • Midscales to watch
                                          • Casual Dining Restaurants

                                            • What’s working?
                                              • A side of entertainment
                                                • Latin cocktails spice up menus
                                                  • What’s struggling?
                                                    • Mainstream casual dining fights for its future
                                                      • Figure 20: Restaurant visitation in the past 30 days, 2012-16
                                                    • A race to the bottom?
                                                      • What’s next?
                                                        • Diner – server model shifts
                                                          • Food halls provide a culinary tour
                                                            • Delivery: casual dining salvation or Band-Aid?
                                                              • Casual dining chains to watch
                                                              • Fine Dining Restaurants

                                                                • What’s working?
                                                                  • Keeping it casual
                                                                    • What’s struggling?
                                                                      • Seafood, salad, and soup falling out of fashion
                                                                        • What’s next?
                                                                          • Light my fire
                                                                            • Veggies galore
                                                                            • The Consumer – What You Need to Know

                                                                              • Fewer consumers are visiting FSRs
                                                                                • Have restaurants hit “peak Millennial”?
                                                                                  • Consumers place quality over deals
                                                                                    • Loyalty programs offers hope for struggling brands
                                                                                      • Interest in a more casual fine dining experience is high
                                                                                      • Behavior Changes – FSR Visitation

                                                                                        • Behavior changes are concerning for FSRs
                                                                                          • Figure 21: Behavior changes – FSR visitation, October 2016
                                                                                        • Female diners are dining out less
                                                                                          • Figure 22: Behavior changes – FSR visitation, visiting more or less, by gender, October 2016
                                                                                        • FSRs need to focus on non-Millennials
                                                                                          • Figure 23: Behavior changes – FSR visitation, visiting more or less, by generation, October 2016
                                                                                        • Only the affluent are dining out more
                                                                                          • Figure 24: Behavior changes – FSR visitation, visiting more or less, by HH income, October 2016
                                                                                        • Parents are dining out more often but are looking for deals
                                                                                          • Figure 25: Behavior changes – FSR visitation, visiting more or less, by parents and number of children, October 2016
                                                                                      • Behavior Changes at FSRs

                                                                                        • Consumers are looking for deals when they dine out
                                                                                          • Figure 26: Behavior changes at FSRs, October 2016
                                                                                        • Men are outspending women at FSRs
                                                                                          • Figure 27: Behavior changes at FSRs, more and less, by gender, October 2016
                                                                                        • Millennial experimentation may be hurting same-store traffic
                                                                                          • Figure 28: Behavior changes at FSRs, more and less, by generation, October 2016
                                                                                      • Reasons for Visiting FSRs Less

                                                                                        • Price, not experience deters FSR visitation
                                                                                          • Figure 29: Reasons for visiting FSRs less compared to one year ago, October 2016
                                                                                        • Women are visiting all restaurants less often
                                                                                          • Figure 30: Reasons for visiting FSRs less compared to one year ago, by gender, October 2016
                                                                                        • LSRs are attracting younger consumers
                                                                                          • Figure 31: Reasons for visiting FSRs less compared to one year ago, by age, October 2016
                                                                                        • Middle and lower income consumers are dropping out of the market
                                                                                          • Figure 32: Reasons for visiting FSRs less compared to one year ago, by HH incomes, October 2016
                                                                                      • FSR Occasion Prices

                                                                                        • Price expectation varies by occasion
                                                                                          • Figure 33: FSR price expectation, median price, October 2016
                                                                                        • Demographic price expectation
                                                                                          • Figure 34: FSR price expectation, median price, by gender and by generation, October 2016
                                                                                          • Figure 35: FSR price expectation, median price, by Hispanic origin, HH income, and by parental status, October 2016
                                                                                          • Figure 36: price expectation, median price, by census region and by area, October 2016
                                                                                      • FSR Chain Visitors – Demographic Profiles

                                                                                        • Methodology
                                                                                          • Applebee’s
                                                                                            • Figure 37: General demographic statistics, Applebee’s Customers
                                                                                            • Figure 38: Demographic breakdown, index against FSR visitors, Applebee’s Customers
                                                                                          • Buffalo Wild Wings
                                                                                            • Figure 39: General demographic statistics, Buffalo Wild Wings Customers
                                                                                            • Figure 40: Demographic breakdown, index against FSR visitors, Buffalo Wild Wings Customers
                                                                                          • Cheesecake Factory
                                                                                            • Figure 41: General demographic statistics, Cheesecake Factory Customers
                                                                                            • Figure 42: Demographic breakdown, index against FSR visitors, Cheesecake Factory Customers
                                                                                          • Chili’s
                                                                                            • Figure 43: General demographic statistics, Chili’s customers
                                                                                            • Figure 44: Demographic breakdown, index against FSR visitors, Chili’s customers
                                                                                          • Cracker Barrel
                                                                                            • Figure 45: General demographic statistics, Cracker Barrel customers
                                                                                            • Figure 46: Demographic Breakdown, index against FSR visitors, Cracker Barrel customers
                                                                                          • Denny’s
                                                                                            • Figure 47: General demographic statistics, Denny’s customers
                                                                                            • Figure 48: Demographic breakdown, index against FSR visitors, Denny’s customers
                                                                                          • IHOP
                                                                                            • Figure 49: General demographic statistics, IHOP customers
                                                                                            • Figure 50: Demographic breakdown, index against FSR visitors, IHOP customers
                                                                                          • Olive Garden
                                                                                            • Figure 51: General demographic statistics, Olive Garden customers
                                                                                            • Figure 52: Demographic breakdown, index against FSR visitors, Olive Garden customers
                                                                                          • Outback Steakhouse
                                                                                            • Figure 53: General demographic statistics, Outback Steakhouse customers
                                                                                            • Figure 54: Demographic breakdown, index against FSR visitors, Outback Steakhouse customers
                                                                                          • P.F. Chang’s China Bistro
                                                                                            • Figure 55: General demographic statistics, P.F. Chang’s China Bistro customers
                                                                                            • Figure 56: Demographic breakdown, index against FSR visitors, P.F. Chang’s China Bistro customers
                                                                                          • Red Lobster
                                                                                            • Figure 57: General demographic statistics, Red Lobster customers
                                                                                            • Figure 58: Demographic breakdown, index against FSR visitors, Red Lobster customers
                                                                                          • Red Robin
                                                                                            • Figure 59: General demographic statistics, Red Robin customers
                                                                                            • Figure 60: Demographic breakdown, index against FSR visitors, Red Robin customers
                                                                                          • T.G.I. Friday’s
                                                                                            • Figure 61: General demographic statistics, T.G.I. Friday’s Customers
                                                                                            • Figure 62: Demographic breakdown, index against FSR visitors, T.G.I. Friday’s Customers
                                                                                        • FSR Visitation Motivators

                                                                                          • Food comes first
                                                                                            • Figure 63: FSR visitation motivators, October 2016
                                                                                          • Location/dishes motivate female diners
                                                                                            • Figure 64: FSR visitation motivators, by gender, October 2016
                                                                                            • Figure 65: FSR visitation motivators, by gender and age, October 2016
                                                                                          • iGens consider service, Boomers want variety
                                                                                            • Figure 66: FSR visitation motivators, by generation, October 2016
                                                                                          • Urbanites care about tertiary factors
                                                                                            • Figure 67: FSR visitation motivators, by area, October 2016
                                                                                          • Consumers that dine out “less” consider food quality
                                                                                            • Figure 68: FSR visitation motivators, by FSR changes in behavior, October 2016
                                                                                        • Ideal FSR Loyalty Program

                                                                                          • Consumers prefer a spend-based loyalty program
                                                                                            • Figure 69: Ideal FSR loyalty program, October 2016
                                                                                            • Figure 70: Ideal FSR loyalty program, among those who would be interested in joining a FSR loyalty program, October 2016
                                                                                          • Ideal loyalty program by demographics
                                                                                            • Figure 71: Ideal FSR loyalty program, by gender, generation, October 2016
                                                                                            • Figure 72: Ideal FSR loyalty program, by Hispanic origin, HH income, parental status, October 2016
                                                                                            • Figure 73: Ideal FSR loyalty program, by region, area, October 2016
                                                                                            • Figure 74: Ideal FSR loyalty program, by FSR changes in behavior, October 2016
                                                                                        • Ideal FSR Loyalty Program Rewards

                                                                                          • Show them the money
                                                                                            • Figure 75: Ideal FSR loyalty program rewards, October 2016
                                                                                          • Hispanics express interest in delivery rewards
                                                                                            • Figure 76: Ideal FSR loyalty program rewards, by Hispanic origin, October 2016
                                                                                          • Urbanites drive interest in unique rewards
                                                                                            • Figure 77: Ideal FSR loyalty program rewards, by area, October 2016
                                                                                          • 55+ consumers want special occasion rewards
                                                                                            • Figure 78: Ideal FSR loyalty program rewards, by age, October 2016
                                                                                          • Consumers visiting FSRs less want monetary rewards
                                                                                            • Figure 79: Ideal FSR loyalty program rewards, by FSR changes in behavior, October 2016
                                                                                        • FSR Attitudes

                                                                                          • Fine dining for the masses
                                                                                            • Figure 80: FSR statement agreement, October 2016
                                                                                          • Making meals a “special occasion” for female consumers
                                                                                            • Figure 81: FSR statement agreement, by gender, October 2016
                                                                                          • Affluent retirees may be an untapped market
                                                                                            • Figure 82: FSR statement agreement, by age, October 2016
                                                                                            • Figure 83: FSR statement agreement, by age + income and employment status, October 2016
                                                                                          • Who are the deal chasers?
                                                                                            • Figure 84: FSR statement agreement, “visiting a FSR is only worth it if I can get a deal,” index against all respondents, October 2016
                                                                                        • CHAID Analysis

                                                                                          • Methodology
                                                                                            • Opportunity for better sports bars
                                                                                              • Figure 85: FSR statement agreement, October 2016
                                                                                          • Appendix – Data Sources and Abbreviations

                                                                                            • Data sources
                                                                                              • Fan chart forecast
                                                                                                • Consumer survey data
                                                                                                  • Abbreviations and terms
                                                                                                    • Abbreviations
                                                                                                      • Terms
                                                                                                      • Appendix – Market

                                                                                                          • Figure 86: Total US revenues and forecast for full-service restaurants, at inflation-adjusted prices, 2011-21
                                                                                                      • Appendix – Consumer

                                                                                                          • Figure 87: Household income distribution, 2015
                                                                                                      • Appendix – Loyal Reward Cross-Interest

                                                                                                          • Figure 88: Ideal FSR loyalty program rewards, cross interest, October 2016

                                                                                                      Fullservice Restaurant Trends - US - January 2017

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