CHICAGO — Although U.S. foodservice industry growth is slow, changes are taking place that will help move it in a positive direction, according to The NPD Group.
The organization forecasts flat to sluggish traffic growth for 2018, but that trajectory could change, according to Bonnie Riggs, restaurant industry analyst for NPD. By focusing on what consumers want, foodservice marketers can better align their strategies to maximize their relevance in 2018 and beyond.
NPD forecasts that in 2018, consumers will:
Be more strapped for time. The demand for convenience is growing exponentially and will only continue to grow, especially at dinnertime. Consumers are looking for people to do the cooking for them or make it extremely easy for them to do so at home. As a result, delivered meals will serve as a source of growth alongside other convenient meal solutions.
Order digitally. Text message and mobile app-based ordering both posted strong growth in 2017. Restaurant operators looking to gain more visits and grow their bottom line must decide which convenience-enablers are worthy of investment. One size does not fit all, making it imperative to understand customers’ wants and needs from a technology standpoint. Operating in a digital world is no longer a nice-to-have option; it is a must-have to drive traffic in a positive direction.
Couch potatoes. Regardless of where food is sourced or who prepares it, meals are increasingly being prepared at home. Due to a changing workforce, the ease of online shopping, and the boom in streaming entertainment, there are fewer reasons than ever to leave the house. Nearly 50 percent of dinners purchased from a restaurant are consumed at home, and many in-home meals are a blend of dishes people prepare on their own and ready-to-eat meals purchased at a foodservice outlet. Operators can win by making it easier to bring food and beverages home.
Expect excellent customer service. Despite the quickly shrinking labor pool and the restaurant industry’s high rate of turnover, having an employee retention program is mandatory, and it should include a process for recruiting, hiring and retaining workers. Satisfied employees are crucial to both employee retention and making customers satisfied with their experience. If greater attention isn’t paid to hiring and retaining good employees, labor costs will escalate at a greater rate while customer satisfaction and revisit intend will decline.
In 2018, foodservice operators will respond by:
Offering value. Quick-service restaurants have historically grown their business by offering value menus, but over the past few years, lower priced offerings have not been promoted as frequently. With traffic nearly at a standstill, some are focusing on the lower end of the price spectrum again, and another round of value wars is likely to begin.
Enticing with limited time offers. Limited-time offers (LTOs) will play an even greater role in restaurant operators’ marketing initiatives in 2018. These incentives appeal to both heavy and lighter buyers, but marketers need to focus on developing strategies to attract the lighter buyers, as the industry has long underestimated their importance. LTOs will likely play an even greater role in this.
Encouraging visits with loyalty programs. These programs are high on the list of incentives that would lead consumers to visit restaurants more often. Although loyalty programs are not new to the restaurant industry, technology has changed how they are executed. This requires developing programs that meet consumer needs using digital as a primary delivery tool. In 2017, multiple major chains launched loyalty programs to drive frequency, and many more are expected to follow.
“Engaging customers remains the key to every operator’s success. In this challenging environment there are many examples of major chains, micro chains, and independents that thrive because they give consumers a great experience, superior food quality, and excellence in service,” Riggs said. “In other words, they give people a reason to visit. These fundamentals are necessary for success across every industry segment — today and beyond.”
