The Foodservice Landscape in the U.S.: Restaurant Industry and Consumer Trends, 2nd Edition

Feb 1, 2012
272 Pages - Pub ID: LA6497863
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While the U.S. economic recovery remains fragile, we find much for the restaurant industry to celebrate. Packaged Facts' Foodservice Landscape forecasts restaurant growth of 4.2% in 2012, on the heels of 6% market growth in 2011.

Nonetheless, the industry continues to face significant challenges. For the past three years, guest traffic volume has come entirely from population growth, not usage increase. Restaurant operators across restaurant segments must also contend with the increased numbers of lower-spending guests and with the loss of higher-income patrons, which has translated to higher volume but lower guest check averages.

Food commodity price increases could also threaten the continuation of the 2010-2011 sales recovery. And while our analysis calls into question the impact of consumer confidence on guest visit frequency, further declines in the unemployment rate are needed to spur restaurant industry growth, as our analysis supports a relationship between the unemployment rate and guest visit frequency across a range of restaurant segments.

This report provides the guidance industry participants need to understand industry and consumer trends shaping the U.S. foodservice landscape, including the quick-service, fast casual, family, casual and fine dining restaurant segments:

  • Restaurant price, promotion and branding strategy assessment, including stepped up industry “fast casualization”; the effect of daily deals on customer ordering habits; and restaurant operators’ menu pricing and promotion strategies.

  • Macro-economic analysis & trending, including an economic forecast through 2014; consumer confidence trends and their application to foodservice; employment trends and their application to foodservice; consumer spending, wealth and debt trends and their application to foodservice; and retail and commodity food price trends and forecasts.

  • Restaurant industry guest traffic trending, including guest traffic count and visit frequency comparisons for three restaurant segments (snack and beverage, limited-service and full-service), along with analysis by demographic and by daypart.

  • Industry-leading restaurant brand analysis covering each major restaurant segment, including menu strategies; customer food lifestyle segmentation analysis; trended guest visit frequency analysis; and performance metrics.

  • Restaurant cuisine & menu trending, focusing on menu item penetration by restaurant segment, including top proteins, sides, kids’ items, healthy claims, and preparation methods.

  • Market size and forecast for restaurant and drinking place sales, same-store sales analysis of major brands for 2005-2011, and consumer restaurant spending by segment for 2007-2010.

  • Assessment of health and wellness trends shaping the restaurant industry, including obesity and calorie count trends; health and food away from home correlations; government and industry health initiatives; and menu labeling effectiveness.

  • Restaurant technology trend analysis, with a focus on increasingly mobile communication-oriented consumers and emerging mobile payment technologies.

Chapter 1: Executive Summary
Scope and Methodology
Scope of coverage
Methodology
Consumer survey methodology
Market size and forecast
Consumer restaurant spend trending
Menu item trend analysis
Other sources
Restaurant categories
Limited-service restaurant definitions
Full-service restaurant definitions
Other definitions
Share of Stomach: Restaurant Sales Analysis
Insight capsule
Restaurant Macroeconomic Analysis
Insight capsule
Fast facts
Restaurant industry guest traffic trends
Insight capsule
Fast facts
Restaurant cuisine & menu trends
Insight capsule
Restaurant Health & Wellness Trends
Insight capsule
Restaurant price, promotion and branding strategies
Insight capsule
Restaurant Technology Trends
Insight capsule


Chapter 2: Share of Stomach: Restaurant Sales Analysis
Overview
Market size and forecast
Shaping growth
A fragile economy performing moderately well
Food commodity prices a potential boogeyman
Significant growth will remain elusive until unemployment rate drops
Potential for long-term shift in HH income distribution
Catering to non-white racial/ethnic groups more important than ever
Market and forecast
Graph 2-1: Sales at Restaurants & Drinking Places, 2006-14
Graph 2-2: Sales at Restaurant & Drinking Places, % Change, 2006-14
Performance context
Food away from home spending share declines, but 2010 growth is stable
Graph 2-3: Food Away from Home vs. Food at Home, 2001-2010
Restaurant Performance Index exhibits moderate strength during 2011
Graph 2-4: Restaurant Performance Index, 2007-2011
Restaurant segment performance & outlook
Quarterly samestore sales comparisons, by brand and restaurant segment
Reading the graphs
One-year and multi-year comparisons
Snack and beverage restaurant performance & outlook
Coffee wins; treats lose
Graph 2-5: Snack & Beverage Restaurant Annual Same-Store Sales Index:
2005-10, 2006-10, 2007-10 & 2008-2010
Positive segment momentum through 2011
Graph 2-6: Snack & Beverage Restaurant Quarterly Same-Store Sales Index:
2008-11, 2009-11 & 2010-11
QSR performance & outlook
Outlook
QSR: The behemoth grows while others falter
Graph 2-7: Quick-Service Restaurant Annual Same-Store Sales Index:
2005-10, 2006-10, 2007-10 & 2008-2010
Mixed momentum through 2011
Graph 2-8: Quick-Service Restaurant Quarterly Same-Store Sales Index:
2005-10, 2006-10, 2007-10 & 2008-2010
Fast casual: some industry leaders, but growth far from universal
Graph 2-9: Fast Casual Restaurant Annual Same-Store Sales Index:
2005-10, 2006-10, 2007-10 & 2008-2010
Positive momentum
Graph 2-10: Fast Casual Restaurant Quarterly Same-Store Sales Index:
2008-11, 2009-11 & 2010-11
Pizza: Domino’s shows sales leadership
Graph 2-11: Pizza Restaurant Annual Same-Store Sales Index:
2005-10, 2006-10, 2007-10 & 2008-2010
Positive signs
Graph 2-12: Pizza Restaurant Quarterly Same-Store Sales Index:
2008-11, 2009-11 & 2010-11
Family restaurant performance & outlook
Graph 2-13: Family Restaurant Annual Same-Store Sales Index:
2005-10, 2006-10, 2007-10 & 2008-2010
Negative momentum
Graph 2-14: Family Restaurant Quarterly Same-Store Sales Index:
2008-11, 2009-11 & 2010-11
Casual restaurant performance & outlook
Casual Bar & Grill narrows losses
Graph 2-15: Casual Bar & Grill Restaurant Annual Same-Store Sales Index:
2005-10, 2006-10, 2007-10 & 2008-2010
Casual bar & grill momentum shifts markedly positive
Graph 2-16: Casual Bar & Grill Restaurant Quarterly Same-Store Sales Index:
2008-11, 2009-11 & 2010-11
Casual Steak takes a beating
Graph 2-17: Casual Steak Restaurant Annual Same-Store Sales Index:
2005-10, 2006-10, 2007-10 & 2008-2010
2011 brings wind to sails
Graph 2-18: Casual Steak Restaurant Quarterly Same-Store Sales Index:
2008-11, 2009-11 & 2010-11
Casual Italian
Graph 2-19: Casual Italian Restaurant Annual Same-Store Sales Index:
2005-10, 2006-10, 2007-10 & 2008-2010
Olive Garden momentum falters
Graph 2-20: Casual Italian Restaurant Quarterly Same-Store Sales Index:
2008-11, 2009-11 & 2010-11
International and seafood casual restaurants
Graph 2-21: Casual International Restaurant Annual Same-Store Sales Index:
2005-10, 2006-10, 2007-10 & 2008-2010
Momentum returns
Graph 2-22: Casual International Restaurant Quarterly Same-Store Sales Index:
2008-11, 2009-11 & 2010-11
Fine dining performance & outlook
Outlook
Fine dining restaurants fall the hardest
Graph 2-23: Fine Dining Restaurant Annual Same-Store Sales Index:
2005-10, 2006-10, 2007-10 & 2008-2010
2011 brings moderate rebound—but 2007 sales levels remain distant
Graph 2-24: Fine Dining Restaurant Quarterly Same-Store Sales Index:
2008-11, 2009-11 & 2010-11
Consumer spending trends
Restaurant growth: follow the money
Table 2-1: Demographic Share of HH Income: 2007-2010
Follow the population
Table 2-2: Demographic Shares of Persons & Households: 2007-2010
Food at home gains
Hispanics driving growth in food spending
Table 2-3: Food, Food at Home, Food Away from Home & Restaurant Expense:
Hispanic v. Non-Hispanic, 2007-10
Driving restaurant spending
Table 2-4: Restaurant Share of Spend, by Restaurant Segment:
Hispanic v. Non-Hispanic, 2007-10
Driving dayparts
Table 2-5: Restaurant Share of Spend, by Daypart: Hispanic v. Non-Hispanic, 2007-10
Growth at opposite ends of the age spectrum
Lifestyle change to mark restaurant spending boom?
Table 2-6: Food, Food at Home, Food Away from Home & Restaurant Expense, by Age, 2007-10
Carrying full-service restaurants
Table 2-7: Share of Spend, by Restaurant Segment, by Age, 2007-10
Daypart spending trends
Table 2-8: Restaurant Share of Spend, by Daypart, by Age, 2007-10
HH income trends
Table 2-9: Food, Food at Home, Food Away from Home & Restaurant Expense, by HH Income, 2007-10
Table 2-10: Restaurant Share of Spend, by Restaurant Segment, by HH Income, 2007-10
Daypart trends
Table 2-11: Restaurant Share of Spend, by Daypart, by HH Income, 2007-10


Chapter 3: Restaurant Macroeconomic Analysis
Overview
Our take: muted optimism
Economic forecast through 2014
GDP: A long time getting back, but finally passes pre-recession levels
Forecast factors
Graph 3-1: Unemployment, GDP & Inflation Forecast, 2011-2014
Analysis: consumer confidence & foodservice
Consumer confidence remains abysmal but is rising from bottom
Present Situation Index increases business condition perceptions & job prospects brighten
Expectations Index rises on business conditions & job prospect optimism
Graph 3-2: Unemployment Rate, Savings Rate & Consumer Confidence, 2007-2011
Foodservice application and analysis
Strong correlations to LSR family, snack and beverage & high-frequency limited-service usage
Table 3-1: Degree of Consumer Confidence, Limited-Service Restaurant Use & Usage Frequency
Weaker correlation to full-service usage
Table 3-2: Degree of Consumer Confidence, Full-Service Restaurant Use & Usage Frequency
Tie between consumer confidence and restaurant brand performance?
Table 3-3: High-Confidence Consumers: Restaurant Brand Usage & High-Frequency Use
Analysis: employment & foodservice
Unemployment remains high but is tapering downward
Job openings rise
Foodservice application and analysis
Rise in the unemployment rate results in lower restaurant engagement
Limited-service restaurant usage among employed consumers remains stable
Table 3-4: Limited-Service Restaurant Usage Frequency Analysis, By Employment Status, 2008-2011
Full-service restaurant usage among employed consumers dips
Table 3-5: Full-Service Restaurant Usage Frequency Analysis, By Employment Status, 2008-2011
Demographic analysis
Trouble areas
Restaurant industry ramifications
Bright spots
Restaurant industry ramifications
Table 3-6: Unemployment Trends, by Demographic, October 2009 to December 2011
Analysis: spending, wealth and debt trends
Consumer spending ticks upward
Inflation-adjusted foodservice & accommodations consumer spending up 4% since 2005
Graph 3-3: Real Personal Consumption Expenditures by Type of Product,
Indexes, 2007-2011
Lower energy prices free up discretionary income for restaurant spending
Graph 3-4: U.S. Regular Gasoline Prices, 2007-2011
Household wealth gradually rebounds
Graph 3-5: Household Net Worth, 2005-2011
Wealth bedrocks follow two different paths
Home prices remain depressed
Wilshire 5000 reflects significant market gains & stock equity strength
Graph 3-6: Wealth Effect: Wilshire 5000 and Case-Shiller Index: 2007-2011
Consumer balance sheets undergoing repair
Household debt burden declines
Financial obligations ratios also drop
Graph 3-7: Consumer Debt Ratios: 2007-2011
Food price outlook
Commodity food prices
Commodity cost containment as profit margin protection
Menu pricing to become a more dicey proposition
Restaurant setback a possibility
McDonald’s commodity costs to rise by 4.5% to 5% in 2012
Managing price increases
Graph 3-8: Producer Price Index, Selected Commodities, 2007-2011
Grocery and restaurant price outlook
Graph 3-9: CPI Forecast, Food at Home & Food Away From Home 2011 & 2012


Chapter 4: Restaurant Industry Guest Traffic Trends
Overview
NPD: Guest traffic trends and forecast summary
Foodservice usage, by foodservice establishment type
Fast food and convenience store foodservice share youth appeal
Usage among 55+s plummets
Table 4-1: Foodservice in Past Month, by Foodservice Outlet: Gender, Age & HH Income
Convenience store foodservice usage varies by race/ethnicity
More of an urban phenomenon
Table 4-2: Foodservice in Past Month, by Foodservice Outlet: Race/Ethnicity, Region & Population Density
Foodservice usage, by daypart
Lunch and dinner exhibit widest usage
Target female snackers
Table 4-3: Foodservice in Past Month, by Daypart: Gender, Age & HH Income
Hispanics a breakfast opportunity?
Urban versus rural
Table 4-4: Foodservice in Past Month, by Daypart: Race/Ethnicity, Region & Population Density
Restaurant guest traffic count and frequency comparisons, 2008-11
Visit frequency definitions
Population growth saves industry
Table 4-5: Restaurant Usage by Major Segment, 3-Year Growth Index, 2008-11
Stable guest visit frequency trends
Table 4-6: Limited-Service & Full-Service Restaurant Guest Visit Frequency, 2008-2011
Age restaurant usage trends
Snack and beverage usage declines
Table 4-7: Restaurant Segment Usage & Growth, by Generation, 2008-11
LSR guest visit frequency, by age
Graph 4-1: Limited-Service Restaurant Usage Frequency, by Age/Generation, 2011
Consumers age 45-64 lead usage growth
Table 4-8: Limited-Service Restaurant Guest Traffic Trending, by Age/Generation, 2008-2011
FSR guest visit frequency, by age
Graph 4-2: Full-Service Restaurant Usage Frequency, by Age/Generation, 2011
Gen Y leads full-service traffic growth
Table 4-9: Full-Service Restaurant Guest Traffic Trending, by Age/Generation, 2008-2011
HH income restaurant usage trends
Downward migration in HH income has serious ramifications for restaurant industry
Table 4-10: Restaurant Segment Usage & Growth, by HH Income, 2008-11
LSR guest visit frequency, by HH income
Graph 4-3 Limited-Service Restaurant Usage Frequency, by HH Income, 2011
<$50K HH income LSR users increase 16%
Table 4-11: Limited-Service Restaurant Segment Usage & Growth, by HH Income, 2008-11
Usage increases most pronounced among <$25K & <$25-$49K HH income users
Table 4-12: Limited-Service Restaurant Guest Traffic Trending, by HH Income, 2008-2011
FSR guest visit frequency, by HH income
Graph 4-4: Full-Service Restaurant Usage Frequency, by HH Income, 2011
Loss of $50K+ FSR users not made up by gains in <$50K HH income users
Table 4-13: Full-Service Restaurant Segment Usage & Growth, by HH Income, 2008-11
Table 4-14: Full-Service Restaurant Guest Traffic Trending, by HH Income, 2008-2011
Race/ethnicity restaurant usage trends
Table 4-15: Restaurant Segment Usage & Growth, by Race/Ethnicity, 2008-11
LSR guest visit frequency, by race/ethnicity
Graph 4-5: Limited-Service Restaurant Usage Frequency, by Race/Ethnicity, 2011
FSR guest visit frequency, by race/ethnicity
Graph 4-6: Full-Service Restaurant Usage Frequency, by Race/Ethnicity, 2011
Hispanic restaurant usage trends
Table 4-16: Limited-Service & Full-Service Restaurant Guest Traffic Trending, Hispanics,
2008-2011
Presence of children restaurant usage trends
LSR guest visit frequency, by presence of children
Graph 4-7: Limited-Service Restaurant Usage Frequency,
by Presence of Children, 2011
FSR guest visit frequency, by presence of children
Graph 4-8: Full-Service Restaurant Usage Frequency,
by Presence of Children, 2011
Daypart guest visit frequency
Summary analysis
Dinner remains biggest draw
Breakfast and snack growth
LSR breakfast, LSR dinner and FSR snack outpace other daypart segments
Table 4-17: Restaurant Use, by Daypart and Restaurant Segment, 2008-11
Daypart restaurant usage, by age
Table 4-18: 2011 Daypart Use, by Restaurant Segment: Age
Daypart restaurant usage growth, by age
Percentage breakfast use among 35-44s grows over time
Percentage snacking use among 25-34s on the upswing
Table 4-19: 2008-2011 Daypart Usage Growth, by Restaurant Segment: Age
Daypart restaurant usage, by HH income
Table 4-20: 2011 Daypart Use, by Restaurant Segment: HH Income
Daypart restaurant usage growth, by HH income
Table 4-21: 2008-2011 Daypart Usage Growth, by Restaurant Segment: HH Income


Chapter 5: Restaurant Cuisine & Menu Trends
Overview
Datassential
What’s hot?
Table 5-1: Top Menu Trends, 2011
Restaurant segment distribution
Table 5-2: Restaurant Brand Distribution, by Segment, 2011
Top proteins
Table 5-3: Top 10 Proteins, Restaurant Penetration, by Segment, 2011
Top sides
Table 5-4: Top 10 Sides, Restaurant Penetration, by Segment, 2011
Kids’ menu item analysis
Hot trends
Table 5-5: Top Kids Menu Trends, 2011
Table 5-6: Top Kids Items, Restaurant Penetration, by Segment, 2011
Healthy menu claims
Table 5-7: Top 10 Healthy Claims, Restaurant Penetration, by Segment, 2011
Menu presence trends
Table 5-8: Top 10 Healthy Claims, Restaurant Penetration, 2007-11
Preparation method analysis
Hot preparation methods
Table 5-9: Hot Preparation Method Trends, 2011
Top preparation methods
Table 5-10: Top Preparation Methods, Restaurant Penetration, by Segment, 2011
Mexican menu presence dwarfs those of other Latin American regions
Table 5-11: Latino/Hispanic Cuisine: Restaurant Industry
Menu Incidence & Brand Penetration, by Segment, 2011
Marketing claims that jumped the shark
Words the restaurant industry has killed
Artisan? Are you sure?
Stretching “local” boundaries
Handmade, yes; but does saying so really convey anything?


Chapter 6: Restaurant Health & Wellness Trends
Making health a priority
The argument in dollars and cents: $150 billion a year
Calories trending higher
Long-term calories trend: negative; short-term trend: positive
Graph 6-1: Caloric Intake by Food Group: Number of Calories, 1970-2009
Restaurant industry growth and the obesity connection
Frequency of restaurant use correlates with negative diet self-perception
Fast food correlation even stronger
Eating out and calories: 1 meal out a week = 2 extra pounds a year
Diet and health tied to type of restaurant frequented
Burgers and fries
Sandwich/sub
Full-service
Consumers underestimate restaurant meal calories
Calorie underreporting raises concerns
Government and industry initiatives quickly gathering steam
MyPlate
HealthierUS School Challenge
Kids LiveWell
Patient Protection and Affordable Care Act of 2010
Health professionals’ hopes
Barriers to effectiveness
No change in transaction volume or calories per transaction
Increased consumer awareness
Consumer confusion
Health apathy at POS
Interaction with restaurant labeling differs from grocery labeling
Expect behavioral change
NPD says calorie information will have little effect on consumer ordering: we disagree
Study context
Changes in food choices and spend
On the menu
How to promote health on the menu
Table 6-1: Successful Health and Nutrition Promotion Strategies, 2011
Reduce the added sugar
How much is too much?
Hold the salt
The cost savings: $32.1 billion?
The restaurant connection
Healthy claims: inherent health leads the pack
Table 6-2: Top Healthy Claims: Restaurant Penetration by Segment, 2011
Healthy claims: trend leaders
Table 6-3: Top Healthy Claims: Restaurant Penetration, 2007-11
Mini trend tapers, but opportunity remains
Next step: portion control without labels
Mini-desserts: incenting use while limiting food content
A trend with legs
“Healthy”: more expensive and often not so healthy
Restaurant segment analysis reveals significant price differences
“Natural” QSR menu items do exist; but does natural mean “healthy”?
Consumers’ propensity to health and nutrition on the upswing
Few have been ordering healthy items
But interest in food health is there
The upside
The downside
Graph 6-2: Food & Diet Propensities: Healthful Propensities, 2007-11
Graph 6-3: Food & Diet Propensities: Indulgence & Dieting, 2007-11
Self-care on the upswing
Graph 6-4: Food & Diet Propensities: Knowledge, Money & Time, 2007-11
Packaged Facts’ proprietary psychographic analysis
Healthy menu introductions
Whataburger
Einstein Bros. Bagels


Chapter 7: Restaurant Price, Promotion and Branding Strategies
Overview
Fast casual as nexus of change
Facing a hard reality
Countering full-service malaise with fast casual concepts: rationales
Brand launches
Red Robin Burger Works
IHOP Express
IHOP Café
A “signature” Steak ’n Shake
Warning: “fast casual” not the easy, simple solution to sales woes
Pei Wei fast casual brand not immune to lowering menu prices
Pei Wei Diner Select
Lower price points lower the barrier to purchase frequency
Stripped down fast casual: Pei Wei Asian Market
“No service” strategy
Non-traditional locations
JambaGo: a non-traditional market foray
Building loyalty
E-mail incentives trigger follow up visits
Tie to cause marketing
Make it more rewarding
Daily deals: weighing the pros and cons of social couponing
Daily deal sites
The “Groupon” effect
An overblown concern?
Pros
Cons
Who daily dealers take with them
How daily dealers choose the restaurant
Daily dealer spending and ordering behavior
Cannibalization effect
Intent to return and recommend
Spinning value
Moving away from extreme affordability
Burger King jettisons $1 menu items
Wendy’s eschews extreme affordability: W mid-tier offering incents value meal trade up
Value as choice
Cheesecake Factory promotes tiered pricing
P.F. Chang’s moves price points downstream
Olive Garden lowers entrée-level price points to incent lower-income guests
Strengthens everyday affordability to reach lower-income households
At Denny’s, everyday value provides the foundation; LTOs provide the balance
$2 $4 $6 $8 Value Menu delivers a chunk of sales
LTOs provide trade-up incentive
Everyday combos
Everyday value promotion: dueling 2 for $20 promotions
Family bundles
All-you-can-eat
Upselling on quality: Domino’s
Product reformulation pays huge dividends
Balancing low-price promotions with higher quality introductions
Artisan Pizza promises quality; provides upselling ammunition
Expanding the demographic
Supplementing menu with more healthful offerings
Expanding cuisine reach


Chapter 8: Restaurant Technology Trends
Overview
Mobile consumers; mobile technology
Why it matters
A plethora of consumer-facing potential
Note on location-based services
Online ordering evolves
Shift to multi-concept platforms
Adapting online ordering to mobile technology
A youth driven phenomenon
Graph 6-1: Mobility & Technology Index, by Age, 2010
Restaurant lifestyle engagement informs technology use
Table 6-1: Mobility & Technology Attitudes & Behaviors
Table 6-2: Mobility & Technology Attitudes & Behaviors, Restaurant Lifestyle Group
Higher-frequency restaurant users' technology connection
Table 6-3: Mobility & Technology Attitudes & Behaviors, High-Frequency Restaurant Segment Users, Selected Restaurant Segments
Success story: Five Guys
Mobile share of online ordering: 33%
Mobile payments
Why it matters
A new era of speed and convenience
Quicker card-based restaurant service
Usage is nascent, but consumer interest is there
NFC payments set for launch and quick uptake
Apple and Google in the wings
Google Wallet arriving at a restaurant near you
Starbucks takes the barcode route
Benefits
Stored value card foundation
26 million transactions and counting
Other developments
Remote drive-thru ordering
Mobile POS growth
Buffalo Wild Wings testing iPad ordering
MCD TV
Incenting sit-down sales?
Call centers build incremental sales


Chapter 9: Restaurant Brand Analysis: Snack & Beverage Segment
Overview
Performance summary: snack and beverage restaurant segment
Coffee wins; treats lose
GRAPH 9-1: Snack & Beverage Restaurant Annual Same-Store Sales Index:
2005-10, 2006-10, 2007-10 & 2008-2010
Positive segment momentum
Graph 9-2: Snack & Beverage Restaurant Quarterly Same-Store Sales Index:
2008-11, 2009-11 & 2010-11
Starbucks Corporation
Beverages comprise three-quarters of retail sales
Table 9-1: Starbucks, Revenue Mix by Product Type, 2009-2011
Recession response
Menu pricing strategies and customer incentives
Social media and technology innovation
A holistic approach firing on all cylinders
Driving toward a strong, unified emotional connection
Food and drink customization online
My Starbucks Idea
Brand managers mingling with the people: what a concept!
My Starbucks Rewards continues to strengthen
iPhone & Android apps
Connecting with Wi-Fi
Mobile payments
eGifting
Customizable Frappuccinos
Retail development innovation
Starbucks juice bar concept
Beverage innovation
Blonde Roast
Evolution Fresh - Beyond Starbucks’ doors
Food innovation
Bistro Box launch
Product innovation
VIA
Seattle’s Best
K-Cups
Graph 9-3: Starbucks Usage Frequency Food Segmentation Analysis
2008-2011 guest traffic frequency analysis: Starbuck’s
General use on decline; higher-frequency use increases
Trouble spots: females, high-income individuals and black consumers
Graph 9-4: 2008-2011 Guest Traffic Frequency Analysis: Starbuck’s
2011 builds on 2010 turnaround
Same-store sales momentum strengthens
Traffic and guest ticket rises
Table 9-2: Starbucks, Selected Metrics, 2007-11
Dunkin’ Donuts
Marketing initiatives - Creating a Fan
2009-11 menu strategy
Beverages
K-cups a hit
Table 9-3: Dunkin Donuts: 2011 New Beverage Menu Items & LTOs
Food
Hitting the right notes with breakfast and snacking
Sandwiches, wraps and dollar menu fill out breakfast menu
Big ‘N Toasty offers premium alternative
Incremental health innovation
Hearty Snacks
Table 9-4: Dunkin Donuts: 2011 New Food Menu Items & LTOs
2008-2011 demographic trend analysis: Dunkin Donuts
Strong usage growth across demographics
Graph 9-5: 2008-2011 Demographic Usage Frequency Trending: Dunkin’ Donuts
Sales performance
Expansion plans and unit growth
Same-store sales improve
Table 9-5: Dunkin’ Donuts, Selected Metrics, 2007-11
Jamba Juice
Food and beverage strategy
New on the menu
Menu-related performance
Retail branding strategy
New store concept to underpin market expansion strategy
Sales performance: Jamba Juice
Table 9-6: Jamba, Inc., Selected Metrics, 2007-11


Chapter 10: Restaurant Brand Analysis: QSR Segment
Overview
Burger King
Growth strategy
Menu initiatives
Barbell strategy remains in place
Breakfast trends
Premium
2011 ushers aggressive value experimentation
Table 10-1: Burger King: 2011 New Food Menu Items & LTOs
Litigation forces Value Menu transition
Incremental ice cream sales bump
Fry wars
Customer food lifestyle segmentation analysis
Application
Graph 10-1: Burger King Usage Frequency Analysis, Food Lifestyle Segmentation
2008-2011 guest traffic frequency analysis: Burger King
18-24s eschewing the brand
Other trouble spots
Graph 10-2: 2008-2011 Guest Traffic Frequency Analysis: Burger King
Sales performance: Burger King
2010 brings guest check pressure
2011 closes gap in same-store sales declines
Table 10-2: Burger King, Selected Metrics, 2008-11
McDonald’s
Tiered menu approach
Dollar Menu to remain a fixture
No trading down to Value Menu
Breakfast: a quarter of sales, with unit volumes on the upswing
Breakfast strategy: sales growth = guest count growth
McNuggets revitalized: Chicken on the upswing
Beverage sales are booming
Coffee lays the foundation for broadening McCafé platform
Other initiatives
Reimaging rolls forward
Extending hours
Increasing capacity with side-by-side drive-thru
Food lifestyle segmentation analysis: Convenience and Ease and Weekend Cooks
Graph 10-3: McDonald’s Usage Frequency Analysis, Food Lifestyle Segmentation
2008-2011 guest traffic frequency analysis: McDonald’s
Customer usage trends the envy of the QSR segment
Trends strong across the board, with one important exception
Graph 10-4: 2008-2011 Guest Traffic Frequency Analysis: McDonald’s
Sales performance: McDonald’s
Table 10-3: McDonald’s, Selected Metrics, 2007-11
Wendy’s
2009-2010 strategy: “Real” food at a real value
Wendy’s reenters breakfast wars with premium QSR differentiation
Redhead Roasters
Tweaking menu strategy by moving away from extreme affordability
Weaning customers off of extreme affordability
The W
2011 menu introductions
Chicken line extensions on the way
“Food Lifestyle” segmentation groups a blend of McDonald’s and Burger King
Graph 10-5: Wendy’s Usage Frequency Analysis, Food Lifestyle Segmentation
2008-2011 guest traffic frequency analysis: Wendy’s
Demographic trends suggest turnaround
Mixed usage trends
Graph 10-6: 2008-2011 Guest Traffic Frequency Analysis: Wendy’s
Sales performance: Wendy’s
Table 10-4: Wendy’s, Selected Metrics, 2009-11
Jack in the Box
Regional footprint and boon and a bane
Highly concentrated Hispanic areas influence restaurant-leading Hispanic share
Table 10-5: Jack in the Box Location & Hispanic Population Analysis
Menu strategy
Value bundling drives traffic but lowers average check
Menu activity
New menu boards
Sales performance: Jack in the Box
Table 10-6: Jack in the Box, Selected Metrics, 2007-11
Domino’s Pizza
Menu overview
Growth strategy
Menu innovation: higher quality products timed with well executed promotions
Product reformulation pays huge dividends
Balancing low-price promotions with higher quality introductions
Artisan Pizza promises quality; provides upselling ammunition
Carryout promotion
Technology innovation
iPhone app passes $1 million in weekly sales
Call center builds incremental sales
Food Lifestyle Segmentation
Graph 10-7: Domino’s Usage Frequency Food Segmentation Analysis
Domino’s delivers to Hispanics
Table 10-7: Domino’s Location & Hispanic Population Analysis
2008-2011 guest traffic frequency analysis: Domino’s
Graph 10-8: 2008-2011 Guest Traffic Frequency Analysis: Domino’s
2008-2011 guest traffic frequency analysis: Pizza Hut
Graph 10-9: 2008-2011 Guest Traffic Frequency Analysis: Pizza Hut
Sales performance: Domino’s
Table 10-8: Domino’s, Selected Metrics, 2007-11
Chipotle Mexican Grill
Competitive positioning: customization; Food with Integrity
Marketing that backs Food with Integrity
2010-2011 menu strategy
Restaurant expansion: ShopHouse translates Chipotle model to different cuisines
Digging deeper into established markets while expanding into new ones
Cultivating loyalty
Farm Team Loyalty program off the ground
Cultivate Chicago guest interaction event
Chipotle Cultivate Foundation
2008-2011 guest traffic trend analysis: Chipotle
Growth across demographic groups
Graph 10-10: 2008-2011 Guest Traffic Trend Analysis:
Chipotle Mexican Grill
Food Lifestyle Segmentation: Variety on a Budget & True Foodies
Graph 10-11: Chipotle Usage Frequency Analysis, Food Lifestyle Segmentation
Sale performance: Chipotle
Industry-leading same-store sales growth
Table 10-9: Chipotle Mexican Grill, Selected Metrics, 2007-11
Panera Bread
Menu initiatives
Trade up winner
Owning the menu category
Paninis go from development to the menu
Breakfast, salads and cookies performing well
What to expect in 2012
Catering
Loyalty program at 8 million members and counting
Panera Bread Food Lifestyle Segmentation
Variety on a Budget and True Foodies turn the doors with greatest frequency
Graph 10-13: Panera Bread Usage Frequency Analysis, Food Lifestyle Segmentation
2008-2011 guest traffic frequency analysis: Panera Bread
Graph 10-14: 2008-2011 Guest Traffic Frequency Analysis: Panera Bread
Sales performance: Panera Bread
Table 10-10: Panera Bread, Selected Metrics, 2007-11
Qdoba Mexican Grill
Aggressive expansion underway
Menu strategy
Sales performance: Qdoba
Table 10-15: Qdoba, Selected Metrics, 2007-11


Chapter 11: Restaurant Brand Analysis: Family Segment
Overview
Family restaurant segment performance summary
Graph 11-1: Family Restaurant Annual Same-Store Sales Index:
2005-10, 2006-10, 2007-10 & 2008-2010
Negative momentum
Graph 11-2: Family Restaurant Quarterly Same-Store Sales Index:
2008-11, 2009-11 & 2010-11
Bob Evans
Growth strategy
Menu trends
New on the menu
Daypart analysis
2008-2011 guest traffic frequency analysis: Bob Evan’s
Broadly based guest traffic losses
Graph 11-3: 2008-2011 Guest Traffic Frequency Analysis: Bob Evan’s
Sales performance: Bob Evan’s
Sequential same-store sales improvement, but still negative
Table 11-1: Bob Evans, Selected Metrics, 2009-11
Cracker Barrel Old Country Store, Inc.
Restaurant operations
Retail operations
Marketing and menu strategy
Menu changes geared toward maintaining relevance and reach
Supplementing menu with more healthful offerings
Kids LiveWell options
Luring the budget-conscious with LTOs
Meet Reformed Traditional food segmentation group halfway on health?
Graph 11-4: Cracker Barrel Usage Frequency Analysis, Food Lifestyle Segmentation
2008-2011 guest traffic frequency analysis: Cracker Barrel
Penetration rates falling; HH income usage trends shifting downward
Graph 11-5: 2008-2011 Guest Traffic Frequency Analysis: Cracker Barrel
Fiscal 2012 outlook
Table 11-2: Cracker Barrel, Selected Metrics, 2009-11
Denny’s
Recession challenges: region, lower-middle income demographic and late-night
Marketing strategy
America’s diner is always open
But other rollouts round out the menu
2010 shift to everyday value supported with LTO entrees
Everyday value provides the foundation
$2 $4 $6 $8, who do we appreciate?
2-4-6-8 Value Menu mix hovering around 20%
LTOs provide the balance
Tour of America
Let's Get Cheesy
Baconalia
Fit Fare
Graph 11-6: Denny’s Usage Frequency Analysis, Food Lifestyle Segmentation
2008-2011 guest traffic frequency analysis: Denny’s
Mixed usage trends: youth a trouble spot
Graph 11-7: 2008-2011 Guest Traffic Frequency Analysis: Denny’s
The Hispanic connection
Denny’s geographic analysis
Table 11-3: Denny’s Location & Hispanic Population Analysis
A non-traditional expansion strategy
Travel centers
Universities
Fast casual
Smaller footprint models on the horizon?
Sales performance: Light at the end of the tunnel
Table 11-8: Denny’s, Selected Metrics, 2007-11


Chapter 12: Restaurant Brand Analysis: Casual Segment
Overview
Chili’s Bar & Grill
Company growth strategy
Franchising/joint ventures
Restaurant operations
On the menu
Entrée pricing
Back-of-the-house: “Kitchen of the Future”
Front-of-the-house: Reimaging
Menu innovation
Everyday value promotion
Experimenting with lunch: from Bottomless Express to Lunch Break
A fast casual response
Going forward
Usage trending downward
Trouble spots: younger consumers and higher HH income consumers
Graph 12-1: 2008-2011 Guest Traffic Frequency Analysis: Chili’s
Menu pricing analysis
Table 12-1: Chili’s, Menu Pricing Analysis, 2007-11
Sales performance: Chili’s
Q3 2011 and going forward
Table 12-2: Chili’s, Selected Metrics, 2008-11
Olive Garden
Menu strategy
First: emphasize promotions
Then, go beyond promotions
Then, strengthen everyday affordability to reach lower-income households
And pick up the pace
2008-2011 guest traffic frequency analysis: Olive Garden
Graph 12-2: 2008-2011 Guest Traffic Frequency Analysis: Olive Garden
Sales performance: Olive Garden
Table 12-3: Chili’s, Selected Metrics, 2008-11


Chapter 13: Restaurant Brand Analysis: Fine Dining
Overview
Morton’s The Steakhouse
Pending sale
Dependence on business spending
Beef, beef and beef
Rounding out the menu
Wine sales holding steady
Private dining boardroom bookings on the rise
Bar 12-21 boosting bar sales
Steak & Seafood for Two promotion extended
Sales performance: Morton’s
On a price-raising tear
Table 13-1: Morton’s Restaurant Group, Selected Metrics, 2008-11
Ruth’s Chris Steak House
On the menu
Demographic
Revenue building strategies and menu moves
Promotional activity
Gift cards
Private dining
Sales performance
Table 13-2: Ruth’s Chris Steak House, Selected Metrics, 2007-11


Appendix
Appendix on food lifestyle segmentation charts

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