Rising Costs at Restaurants Have More Americans Saying, "We Have Food at Home."
Vericast finds consumers are trading down and dining out less due to continued price increases
SAN ANTONIO, May 2, 2024 /PRNewswire/ -- Around 50 billion hamburgers are consumed a year in the U.S.,1 presenting a big opportunity for restaurants to reach consumers' hearts through their stomachs at a reasonable price point. Research from Vericast shows 60% of consumers surveyed will 'trade down' from a casual dining restaurant to fast food for less expensive burger prices.
According to Vericast's 2024 Restaurant TrendWatch report, the same goes for other fan favorites ? pizza and tacos ? with 55% of respondents switching to frozen pizza from the grocery store versus pizza from a restaurant, and 55% opting to get fast food tacos instead of fast casual dining. Notably, 67% say the increased costs are making restaurant dining too expensive. The uptick from 64% last year shows cost concerns are still climbing.
While both grocery and restaurant prices continue to rise even as inflation slows, restaurant prices are climbing at a much higher rate than groceries ? 5.1% annually versus 1.2%.2 Sixty-eight percent of respondents are trading down from restaurant meals to food from the grocery store to avoid the rising costs, with more than 71% of Gen Z and millennials doing so.
"The steadily increasing cost of dining out is testing the limits of what consumers can and will spend," said Dana Baggett, executive director, Restaurant Division at Vericast. "There's a noticeable decrease in consumers dining out, especially with consumers that have a household income under $75,000. Many diners are choosing to dine out less, trade down to less expensive restaurants, order less or opt to eat out for more affordable mealtimes like breakfast or snacks. As consumers are intentionally spending less at restaurants, acquiring new guests should be a key area of focus for restaurant brands. With the intensifying competition for share of stomach, I anticipate acquisition strategies such as offering deals and coupons to increase, as this is the fastest way to drive incremental sales and traffic."
Other key findings and insights from the survey include:
Deals! Deals! Deals! With the cost of food and groceries continuing to rise and restaurant prices also increasing, consumers are looking at special deals when choosing to dine out. Restaurant discounts and coupons remain important for consumers.
- 51% of respondents say a coupon or discount entices them to try a restaurant and 49% say deals help them choose between restaurants.
- Due to rising prices, 30% say they won't try a restaurant without a coupon or discount offer.
- 42% will order from restaurants more often if they have a print coupon or are being offered a discount.
- When asked what helped them decide where to dine in the past 30 days, 25% said a discount on a restaurant app and 23% said a print ad with coupons.
- When fast food customers have a coupon/discount, about half (49%) will spend more by upgrading items or ordering more.
The Digital Influence on Dining Decisions. Consumers are increasingly on social media and mobile apps, so using these channels to reach diners, capture their attention, and drive them to action is more important than ever.
- Inspired by recipes and videos they are seeing on social media, 39% of consumers are opting to do more home-cooked meals.
- TikTok is especially prevalent, with 29% saying they get inspired to make restaurant copycat meals at home after seeing cooking videos on the app.
- 25% of diners, especially among Gen Z, parents, and people dining out at least once a week or more, are attracted to a restaurant through dining apps.
- 52% have two or more restaurant apps on their mobile phone and 34% say they have three or more.
To learn more about how the rising cost of restaurant meals impacts consumer spending and how restaurants can optimize marketing campaigns to bring more value to diners, read the 2024 Restaurant TrendWatch report.
About Vericast
Vericast is a marketing technology company that provides a data-rich approach to influence consumers and drive meaningful commerce. We power smarter activations for more than 15,000 clients in consumer packaged goods, financial, grocery, restaurant, retail, and more. Our decades of experience, advanced technologies, and broad solutions portfolio help companies reach audiences with precision and scale.
1 Hamburger Trivia: Everything You Ever Needed To Know
2 Consumer Price Index News Release - 2024 M01 Results (bls.gov)
SOURCE Vericast
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