Description

Providing the most comprehensive and up-to-date information and analysis of U.S Restaurant Value and Pricing market including the behaviors, preferences and habits of the consumer.

Value is always a key consideration when dining out, and this is especially true during periods of economic hardship and recessionary recovery. While many consumers are choosing conservatively, foodservice operators are also still struggling to recover losses that resulted from the pandemic. Instead of competing on price points, restaurants will need to appeal to Americans’ other pressing value needs, including the convenience of digital ordering, takeout and delivery options and budget-friendly deals that boost check averages instead of cutting into an operator’s bottom line.

Read on to discover more details or take a look at all of our U.S Food and U.S Drinks market research.

Quickly understand

  • The impact of the COVID-19 crisis on consumer behavior and restaurant value and pricing.
  • The recessionary and recovery impact for restaurant value and pricing.
  • Balancing value and the bottom line.
  • Competing with unique value channels like retail foodservice.

Covered in this report

Definitions used: Serious Value Seekers: Americans who say value is important or extremely important when choosing a restaurant. Value Seekers: Americans who say value is extremely important, important or somewhat important when choosing a restaurant.Value-Neutral Consumers: Americans who say value is neither important nor unimportant when choosing a restaurant. Value Rejecters: Americans who say value is somewhat unimportant, unimportant or not at all important when choosing a restaurant.

Expert analysis from a specialist in the field

Written by Jill Failla, a leading analyst in the Foodservice sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Value remains top of mind for dining decisions as many Americans cut back on foodservice spending due to the ongoing COVID-19 crisis and economic uncertainties. Restaurants must improve the convenience of their off-premise options via tech solutions for faster and effortless ordering, pickup and delivery to satisfy consumers’ needs and speed up their own sales recoveries.

Jill Failla

Senior Foodservice Analyst

Table of Contents

  1. Overview

    • What you need to know
    • Key issues covered in this Report
    • Definition
    • The COVID-19 pandemic: restaurant value and pricing context
  2. Executive Summary

    • Top takeaways
    • Target audience overview
      • Figure 1: Value consumer segmentation, November 2020
      • Figure 2: Total US sales and forecast of restaurants and eating places, by segment, at current prices, 2015-25
    • Impact of the COVID-19 crisis on restaurant value and pricing
      • Figure 3: Short-, medium- and long-term impact of COVID-19 on restaurant value and pricing, January 2021
    • Opportunities and challenges
    • FSRs must win back middle-income households
      • Figure 4: Value behaviors, by household income, November 2020
    • Retail foodservice steals occasions from operators
      • Figure 5: Prepared food purchasing frequency year over year, September 2020
    • Deliver convenience first
      • Figure 6: Value definition – NET any rank, by generation, November 2020
    • Focus price incentives on adding value, not shrinking margins
      • Figure 7: Value attitudes, by household income, November 2020
    • Drive digital channel usage with digital-only deals
  3. The Market – Key Takeaways

    • Serious Value Seekers tend to be younger, middle-income and financially strained
    • Gap widens in US between the haves and have nots
    • Restaurant sales losses, rising food prices make low prices harder to compete on
  4. Value Diners by the Numbers

    • Most Americans are Value Seekers
      • Figure 8: Value consumer segmentation, November 2020
      • Figure 9: Value consumer segmentation, November 2020
      • Figure 10: Value consumer segmentation – Serious Value Seekers, November 2020
    • Divide grows between haves and have nots
    • This divide factors more into price needs than value ones
      • Figure 11: Share of aggregate income received by each fifth and top 5% of households, 1970-2019
      • Figure 12: Restaurant ordering methods – Any dined at a restaurant NET, by household income, July-September 2020
    • Impact of the COVID-19 crisis on restaurant value and pricing
      • Figure 13: Short-, medium- and long-term impact of COVID-19 on restaurant value and pricing, January 2021
    • The COVID-19 pandemic: US context
  5. Market Factors

    • The 2020 recession will have worse outcome for restaurants than Great Recession
      • Figure 14: US restaurant sales, at current prices, 2008-13
    • FSRs must make extra investments to compete with LSRs on value
      • Figure 15: Total US sales and forecast of restaurants and eating places, by segment, at current prices, 2015-25
      • Figure 16: Market share of total US sales and forecast of restaurants and eating places*, by segment, 2019-25
    • Unemployment rates remain high, especially among Black and Hispanic Americans
      • Figure 17: Hispanic, Black and overall US labor unemployment rates, January 2007-November 2020
    • High food costs force restaurants to consider raising prices
      • Figure 18: Changes in Consumer Food Price Indexes, 2018-2021
    • Retail foodservice threat grows as value-friendly option with more people grocery shopping
      • Figure 19: Prepared food purchasing frequency year over year, September 2020
  6. Market Opportunities

    • Make convenience the top priority
    • Home in on smart, budget-friendly deals during recession recovery
    • Flexible formats satisfy varied daypart needs
    • Drive demand with LTOs
  7. Companies and Brands – Key Takeaways

    • Drive digital usage with digital-only deals
    • Offer more budget-friendly options outside of core dayparts
    • Encourage repeat purchases with subscription services
  8. Competitive Strategies

    • Loyalty programs make mainstream debut
      • Figure 20: Value behaviors – CHAID – Tree output, November 2020
    • Family meal deals proliferate
      • Figure 21: Chick-fil-A email “Introducing easy meal ordering to feed your family,” April 3, 2020
    • Subscription programs drive repeat purchases
    • Off-peak dayparts boost incremental revenue
  9. The Consumer – Key Takeaways

    • Taste and quality are cornerstones of restaurant value
    • Appeal to women with budgeting and men with convenience
    • Two adult entrées for a discounted price tops value option interest
  10. Value Consumer Segmentation

    • The vast majority of Americans prioritize value when dining out
      • Figure 22: Value consumer segmentation, November 2020
    • Gen Zs are the least likely of any generation to care about value
      • Figure 23: Value consumer segmentation, by generation, November 2020
  11. Value Definition

    • Taste/quality is more important than price to good restaurant value
      • Figure 24: Value definition – NET – Any rank, November 2020
    • Value Rejecters are most likely to prioritize easy ordering options
      • Figure 25: Value definition – NET – Any rank, by value consumer segmentation, November 2020
    • Women equate fresh preparations with a good value
      • Figure 26: Value definition – NET – Any rank, by gender, November 2020
    • Young consumers prioritize speed and convenience for value equation
      • Figure 27: Value definition – NET – Any rank, by generation, November 2020
    • Higher-earning Americans associate good value most with taste, quality
      • Figure 28: Value definition – NET – Any rank, by household income, November 2020
  12. Value Perception by Foodservice Segment

    • Casual dining restaurants have strongest value perception
      • Figure 29: Value perception by foodservice segment, November 2020
    • Millennials have highest value perception of foodservice overall
      • Figure 30: Value perception by foodservice segment – NET – Any good, by generation, November 2020
    • White consumers are least likely to consider c-stores a good value
      • Figure 31: Value perception by foodservice segment – NET – Any good, by race and Hispanic origin, November 2020
    • Dads have best value perception of fast food and c-store prepared foods
      • Figure 32: Value perception by foodservice segment – NET – Any good, by parental status and gender, November 2020
  13. Value Behaviors

    • Recession further slows down foodservice recovery
      • Figure 33: Value behaviors, November 2020
      • Figure 34: Value behaviors – CHAID – Tree output, November 2020
    • Men more likely to want premium ingredients, will pay for them
      • Figure 35: Value behaviors, by gender, November 2020
    • Millennials are the most engaged with restaurant loyalty programs
      • Figure 36: Value behaviors, by generation, November 2020
    • Lower-income consumers not dining out less due to recession, despite financial constraints
      • Figure 37: Value behaviors, by household income, November 2020
  14. Value Option Interest by Restaurant Segment

    • Discounted entrées at full-service restaurants have widespread appeal
      • Figure 38: Value option interest by restaurant segment, November 2020
      • Figure 39: Value option interest by restaurant segment – NET – Any restaurant segment, November 2020
    • Young consumers want off-peak daypart value options
      • Figure 40: Value option interest by restaurant segment – NET – Any restaurant segment, by generation, November 2020
    • Dads are by far the most interested in restaurant subscription programs
      • Figure 41: Value option interest by restaurant segment – NET – Any restaurant segment, by parental status and gender, November 2020
  15. Value Attitudes

    • Consumers aren’t very interested in a new tipping structure at restaurants
      • Figure 42: Value attitudes, November 2020
    • Young consumers rely on social media for restaurant deals
      • Figure 43: Value attitudes, by generation, November 2020
    • FSRs must work extra hard to appeal to lower-income consumers with budget-friendly options
      • Figure 44: Value attitudes, by household income, November 2020
  16. Appendix – Data Sources and Abbreviations

    • Data sources
    • Consumer survey data
    • Direct marketing creative
    • Abbreviations and terms
    • Abbreviations
    • Terms
  17. Appendix – The Market

      • Figure 45: Total US sales and forecast of limited-service eating places*, at inflation-adjusted prices, 2015-25
      • Figure 46: Total US sales and forecast of full-service restaurants, at inflation-adjusted prices, 2015-25
  18. Appendix – The Consumer

    • CHAID Methodology
      • Figure 47: Dine-in intentions, by household income, September 2020
      • Figure 48: Value perception by foodservice segment – NET – Any good, by value consumer segmentation, November 2020
      • Figure 49: Value option interest by restaurant segment – NET – Any restaurant segment, by value consumer segmentation, November 2020
      • Figure 50: Value attitudes, by value consumer segmentation, November 2020

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