Dive Brief:
- Consumers spend about 40% of their food budgets on restaurants, based on a May Popmenu survey of over 1,000 customers.
- When ordering from restaurants on-line, 33% of diners spend $50 or extra on common, per the survey. Forty-five p.c of customers eat in restaurants not less than twice every week.
- As inflation squeezes budgets, customers report they might be extra prone to lower spending on garments, journey, fitness center memberships, rideshare providers and extra earlier than lowering restaurant spend, Popmenu finds.
Dive Insight:
In the previous few weeks, a number of main restaurant chains introduced plans to hike menu costs to offset food prices — a pattern that might probably erode shopper spend at restaurants.
Still, Popmenu finds that 29% of customers really feel it’s cheaper to order from restaurants than to purchase elements to make meals at dwelling from the grocery retailer. Twenty-seven p.c of customers really feel these prices are comparable.
“While customers are protecting a more in-depth eye on financial traits and their general spending, restaurant eating continues to account for a good portion of their food budgets every month,” Brendan Sweeney, CEO and co-founder of Popmenu, mentioned in an announcement.
It’s unclear, nevertheless, what varieties of restaurants are benefiting from this shopper confidence. Placer.AI information means that extra diners could also be “trading down,” or spending extra at value-focused manufacturers like McDonald’s, as restaurants grow to be dearer. But menu worth will increase sweeping the QSR area might finally erode shopper frequency or ticket sizes as diners tighten their budgets.
Chipotle, for instance, will improve its pricing by 4% in August after beforehand elevating menu costs 4% in December. CFO Jack Hartung mentioned on Chipotle’s Q1 earnings name that diners haven’t been dissuaded by the dearer meals, nevertheless. Comparatively, Domino’s menu costs rose roughly 6% throughout Q2, and McDonald’s boosted U.S. costs roughly 8% in Q1, contributing to same-store gross sales development in Q2.
“Where they ultimately choose to spend their dollars is, in part, influenced by how much the restaurant is keeping consumers engaged through digital outreach and how frictionless the overall experience is both online and on-premise,” Sweeney mentioned of customers. “Quality, convenience and value are top of mind.”