As restaurants and retailers wait eagerly for December’s final sales numbers to roll in, let’s pause to enjoy five stats worth celebrating from 2014.
- Many Americans are feeling better about their finances! Forty-two percent of American consumers polled by Technomic and American Express in November this year said they are “living comfortably” or are “very well off”—that compares with 34% who said the same a year ago and 21% who felt on pretty firm financial footing in November 2012.
- Fast casual is still on a tear. As we noted last week, same-store sales at leading fast-casual chain restaurants grew 8% in Q3. Casual-dining and quick-service chains saw modest same-store sales upticks of 1.9% and 1.2%, respectively, during the same period.
- Improved consumer confidence—thanks, job growth and falling gas prices!—should contribute to growth in alcohol beverage sales in 2015. Technomic forecasts that consumer expenditures on alcohol will rise 2.7% at on-premise locations such as restaurants, bars and concessions areas next year. Income inequality is a serious issue with which the restaurant industry will contend in 2015 and beyond, but fine-dining restaurants, pricier lodging establishments and other facilities that serve higher-income clientele fared well in 2014 and are expected to continue to outperform other venues in alcohol beverage sales growth next year.
- More money in Millennials’ pockets = more foodservice visits. More members of this huge consumer cohort are reaching their prime earning years, and that’s good news for traffic-hungry restaurants. More than one-third of Millennials polled for Technomic’s 2014 Generational Consumer Trend Report said they’re visiting restaurants and other foodservice locations more often now than they were two years ago.
- Consumers indicated this year that they’d be more likely to “trade up” from a fast-casual restaurant to a traditional casual-dining spot than to “trade down” from a fast-casual concept to a fast-food one. Two years ago, equal shares of consumers (43%) named casual-dining and fast-food restaurants as preferred alternatives to fast-casual concepts. In 2014, 47% said they’d be likely to choose a traditional CDR (such as Applebee’s) as a fast-casual alternative; 40% said a fast-food outlet would be a leading contender. Consumers’ growing willingness to spend a bit more for what they perceive to be a higher-quality experience is a good sign for the struggling casual-dining segment.
Consumers still are price-conscious—they’re no less likely to be seeking out deals and promotions than they were during the recession (indeed, deal-seeking behavior is ingrained now). But we see signs that they’re willing to spend when they’re confident that their foodservice purchase will be a good overall value. An emphasis on the whole of the dining-out experience and on offering fresh, premium-tasting flavors—quality beats quantity, from a menu perspective—at a competitive prices will help restaurant brands win consumers over (over and over again) in 2015.