A recent Restaurant Hospitality article talks about many industry experts’ predictions for restaurant spending to rise over the next five years. Although restaurant spending only grew by 3% in the 12 months ending April 2015, restaurant operators should be preparing for a future consumer splurge and making sure they are equipped to service this traffic increase.
The article says that research by Mintel, an industry research firm, finds that, “U.S. consumers are returning to their pre-recession, save-less-spend-more mindset," which is driven by factors including increasing wages, lower unemployment and improved consumer confidence for the emerging turnaround. The firm’s prediction is that restaurant visits will increase as “nonessential categories – such as dining out – will see the greatest gains with a projected five-year increase of 27%". This research supports findings reported in a recent FastCasual article, which state that according to Technomic the food industry will hit $2 trillion by the year 2025.
Restaurants need to stay one step ahead of their competitors in order to gain an optimal piece of this growing market share, and one final prediction from the article is the importance of targeting the under-35 clientele (especially millennials, age 18-34), as this important demographic have been decreasing their restaurant visits. This puts restaurant operators not only in competition with each other, but also with in-home dining as well, which rose dramatically among this key demo in recent years. An article in FastCasual called Millennials 'one of the top consumers that restaurants can’t afford to ignore', saying that according to the U.S. Census Bureau, "The millennial generation has officially surpassed the baby boomers as the nation's largest living generation."
Important restaurant characteristics for millennials include a fun vibe, fresh made-from scratch food, technology-friendly, and a commitment to various forms of Corporate Social Responsibility - especially those that include responsibly sourced food. Paying attention to these differentiators will increase the likelihood of attracting a millennial crowd.
The fast casual industry is already known for its steps in many of the above mentioned traits, and is therefore primely positioned to eat away at a large part of the increased spending that is predicted to make itself available in the next few years. All restaurants, regardless of their segment in the industry, are advised to ignore the coming growth boom at their own risk!