Consumer Trends

Restaurant sales and consumer sentiment see boosts

There is hope on the horizon, as sales at the nation’s restaurants increased in the second half of 2010, and consumer sentiment is on the upswing despite continued high unemployment rates impacting the amount of available disposable personal income consumers have to spend on breakfast at restaurants as well as the number of people heading to work stopping at a restaurant for their breakfast meal.

BFY and LTO drive breakfast trends

Consumers have continued to voice their demand for healthier breakfast items on menus and although the industry has in general been slow to respond, there has been an increase in options, although there is ample room for growth.
LTOs will continue to prove to be a way for operators to test-market menu items and also serve as a way to skirt impending nutritional labeling laws.

Trends are seen across the segments

Fast food restaurants have been continuing to work on breakfast menu development. More players are reformulating their menu and testing (or re-testing) entirely new menus, and breakfast sandwiches serve as the foundation of the menu at quick serves. More artisanal ingredients are beginning to make a presence.
At fast casual chains, the breakfast push has been with BFY options, particularly “skinny” bagels, as well as getting a jump on the encroachment of QSRs in the artisanal ingredient arena. Au Bon Pain has introduced a Turkey, Egg, and Cheddar on a Skinny Bagel and continues to implement new in-store and online features to help customers make sound nutritional decisions.
At family chains, breakfast menus are showing signs of the increased demand for healthier fare in the form of menu additions and suggested modifications. Another tactic for attracting customers is the implementation of aggressive pricing strategies, such as has been at the core of efforts by Denny’s.
Coffee chains have been working to ensure that their morning coffee customer does not have to go elsewhere to get a meal, and Caribou Coffee is the latest chain to roll out a line of breakfast sandwiches to meet that need.

Restaurant breakfast spending trends

The majority of respondents say that they are cutting back on spending, both during the week and on weekends. Women are especially likely to be sensitive to cost, and could be drawn in through incentives such as discount pricing on healthy kids’ menu items.
A halo of special pricing will continue to be necessary, although this could be best done with minimal impact to operators in the form of LTOs. Ultimately, value pricing for at least a portion of the menu will remain an essential element of attracting breakfast customers.

Restaurant selection factors for breakfast

Above all, value is at the heart of what determines restaurant selection for customers. This is particularly true during the week. However, during the week, convenience is also an essential element and restaurants have to be able to get customers in and out and not disrupt their day.
Time and convenience are especially important to younger customers, and tiered pricing on combo meals can be a way for them to control budgets. This can also be an effective way to attract budget-conscious patrons.
Weekends are when diners spend more leisurely time over their morning meal. Older patrons, however, are likely to have more time on weekdays as well, and whenever they dine out for breakfast, they are looking for atmosphere and quality food.

Menu items ordered for breakfast

Handheld breakfasts are hugely popular, particularly during the week. For restaurants looking to distinguish themselves and their menus, adding more artisanal ingredients can create a differentiator from a standard breakfast offering.
On the weekends, breakfasts are more substantial, but with minor BFY modifications, customers can still feel they are getting a more substantial weekend breakfast without the guilt.

Attitudes toward restaurant breakfasts

Healthy breakfast items continue to be the number one demand among consumers, with a full 66% of respondents making the request.
New breakfast menus have gotten the (positive) attention of customers, suggesting that there is ample room for further growth of the morning daypart.

Source: Mintel, Breakfast Restaurant Trends, February 2011