American consumers love eating at restaurants. Advertising Age magazine reports on research that says we consumed 207 restaurant meals per person in the U.S. in 2006. The restaurant industry has enjoyed many years of growth as Americans patronize their restaurants as part of their busy lifestyles. More women were in the workforce, making it more difficult to find time to prepare meals at home. Besides, many Americans enjoyed the economic prosperity of the late 1990s and the last few years. More disposable income (or more credit cards) had people eating more meals out of the home.
The dining out trend is changing; the percentage of women in the workforce has dropped after topping out in 2001. Also, many Americans who are feeling the pinch of rising interest rates and higher mortgage payments may have less financial freedom to eat out. These changing trends are hurting the casual dining segment of the restaurant industry. Chains like Applebee's are struggling as their rapid growth over the past decade followed consumer trends at that time, but the business is not as strong now. The beneficiary of the trend has been supermarkets, a category that suffered when casual dining restaurants enjoyed their growth. It's not just that more people are buying meals to prepare at home from supermarkets. To the credit of many supermarkets, they responded to consumers' desires for easy to prepare meals by offering items that are of comparable quality to casual dining menu offerings.
Customer trends change. It's one thing to react to them after they happen, as supermarkets did as their business eroded in the 1990s. It's another thing to look ahead and try to detect trends before they become a threat to their business, as casual dining restaurants now are experiencing. What is the plan to lure patrons in to their establishments more frequently? That plan should have been devised when times were good so that companies do not find themselves in panic mode attempting to overcome changing trends. Link
Labels: Consumer Behavior