Family/Midscale Restaurants - US

Family/Midscale Restaurants - US

Abstract:

Given family restaurants’ success with the breakfast menu and the importance of coffee, it virtually necessitates these operators jump on the bandwagon in the gourmet coffee trend.

Taking a cue from McDonald’s McCafé, a similar effort could help family restaurants strengthen their appeal to key demographics—women, under-35s and higher-income households, and could help build to-go business.

Table of Contents:

SCOPE AND THEMES

What you need to know

Definition

Data sources

Sales data

Mintel Menu Insights

Consumer survey data

Advertising creative

Abbreviations and terms

Abbreviations

Terms

EXECUTIVE SUMMARY

The challenge of a recession

Declining same-store sales signals trouble with guest traffic

It’s a “diner’s market”—value prices result from excess supply of restaurant choices

Influential demographics—age and race/Hispanic origin

Family restaurant analysis

IHOP

Denny’s

Cracker Barrel

Golden Corral

Bob Evans Farms

Menu focus: IHOP

Advertising and promotion activity

Menu innovation—comfort and breakfast

Health on the menu—a long way to go

The family restaurant consumer

Where consumers go to eat

Which family restaurants consumers go to

Family restaurants and the ethnic consumer

Family restaurants and “the family”

What influences diners to choose family restaurants

Reasons that drive choice of restaurants

When, where and how consumers eat at restaurants

MARKET SIZE AND FORECAST

Key points

Declining same-store sales trends signal guest traffic troubles

Figure 1: Selected family restaurant chains same-store sales growth trends, 2005-09

Family restaurants feeling pressure as diners trade down/out

The future of family restaurants

Figure 2: Total U.S. systemwide sales of leading family restaurants, at current prices, 2005-13

Figure 3: Total U.S. systemwide sales of leading family restaurants, at inflation-adjusted prices, 2005-13

COMPETITIVE CONTEXT

It’s a diner’s market

Casual restaurants: Discounting galore and “all you can eat” specials

QSR: Actively courting the breakfast consumer

Pizza: A convenient family pleaser

Fighting over the kids

MARKET DRIVERS

Restaurant industry recession continues, but the bottom may be in sight

Figure 4: Restaurant Performance Index, current situation, and expectations, May 2007-July 2009

Consumer confidence undermines willingness to spend at restaurants

Figure 5: Consumer Sentiment Index, by quarter, 2001-09

Figure 6: Family restaurant spend compared to last year, by age, household income and race/Hispanic origin, July 2009

Baby Boomers key consumers; Millennials offer growth potential

Figure 7: Usage of family restaurant, top restaurants, by age, February 2008-March 2009

Figure 8: Population aged 18 or older, 2004-14

Usage among the fastest-growing ethnic groups lags

Figure 9: Usage of family restaurant, top restaurants, by race/Hispanic origin, February 2008-March 2009

Figure 10: Population, by race and Hispanic origin, 2004-14

LEADING COMPANIES

Key points

Leading family restaurant chains weather the recessionary storm

Figure 11: U.S. systemwide sales of leading family restaurant chains, 2006-08

Unit growth declining incrementally

Figure 12: U.S. systemwide units for leading family restaurant chains, 2006-08

RESTAURANT ANALYSIS: IHOP

Key points

Growth trends

Figure 13: Change in IHOP systemwide same-store sales, 2005-08

Keeping the brand fresh and energized

Value-oriented, limited-time offers

Marketing and promotion drive brand awareness

Demographic connections

Attracting higher-income consumers through customizable options

Maximizing appeal for parents of little ones

Ethnic opportunities

Figure 14: Eat at IHOP, by age, race/Hispanic origin and household income, February 2008-March 2009

RESTAURANT ANALYSIS: DENNY’S

Key points

Growth trends

Figure 15: Change in Denny’s same-store sales, 2005-08

Seeking improvements in 2009 through value and innovation

Value—free food incentive to drive guest traffic

Menu innovation—diversity plus a new burger focus

Health initiatives—innovation on the kids’ menu

Courting key demographics

Making the late-night connection with its young diners

Hispanics

Figure 16: Eat at Denny’s, by age and race/Hispanic origin, February 2008-March 2009

RESTAURANT ANALYSIS: CRACKER BARREL

Key points

Growth trends

Figure 17: Change in Cracker Barrel systemwide same-store sales, 2005-09

A differentiated concept

The front porch environment

The retail shop

Successful at lunch and dinner—driving average check higher

Figure 18: Cracker Barrel, share of sales by daypart, 2009

Source: Mintel/Cracker Barrel

Streamlining traditional menu

The Cracker Barrel customer

Figure 19: Eat at Cracker Barrel, by age, region, race/Hispanic origin and presence of children, February 2008-March 2009

RESTAURANT ANALYSIS: GOLDEN CORRAL

Key points

Growth trends

The buffet advantage

New prototype

An abundance of choices for all

Potential to expand ethnic reach

Figure 20: Eat at Golden Corral, by race/Hispanic origin, February 2008-March 2009

RESTAURANT ANALYSIS: BOB EVANS FARMS

Key points

Growth trends

Figure 21: Change in Bob Evans annual prices and systemwide same-store sales, 2005-09

Regional brand with national presence

Home-style menu

Figure 22: Bob Evans Farms, share of sales, by daypart and average check, 2009

Source: Mintel/Bob Evans

Strong regional influence; little ethnic appeal

Figure 23: Eat at Bob Evans, by region and race/Hispanic origin, February 2008-March 2009

MENU ANALYSIS: IHOP

Overview

Menu favorites: Breakfast items are the clear winner

Men look for heartier fare

Figure 24: IHOP menu ordering on last visit, by gender, July 2009

Young diners look beyond the traditional breakfast menu when ordering

Figure 25: IHOP menu ordering on last visit, by age, July 2009

ADVERTISING AND PROMOTION

Overview

Figure 26: Top family restaurant chain advertisers, 2007 and 2008

Targeting competition with a $5 price point

Sizzler’s strategy: Limited value menu

Figure 27: Sizzler, 5 for $5, March 2009

Bob Evans’ strategy: Value portions

Figure 28: Bob Evans, Deep Dish Pastas, September 2009

Shoney’s strategy: Abundance

Figure 29: Shoney’s, Small Amounts of Food, September 2009

Strategy: Value menu

Justifying a higher price point

Strategy: Entice customers who equate value with quantity and choice

Figure 30: Golden Corral, Amusement Park of Food, September 2009

Figure 31: Ponderosa, Freedom by the Plateful, July 2009

Figure 32: Friendly’s, Flip chart presentation, September 2009

INNOVATIONS AND INNOVATORS

MENU INNOVATION

Key points

Comfort foods top innovation

Homemade equals familiarity

Country style equals southern comfort

Figure 33: Top family restaurant menu items, by marketing claim, Q3 2007-Q3 2009

Breakfast innovation

Figure 34: Family restaurant usage, by daypart, July 2009

Figure 35: Top family restaurant menu items, by menu item dish, Q3 2007-Q3 2009

HEALTH ON THE MENU

Key points

Health: Consumers’ perceptions

Figure 36: Consumer diet self-perceptions, degree of healthfulness, July 2009

Figure 37: Importance of eating healthy, degree of importance, July 2009

Defining health

Nutritional menu items lacking

Figure 38: Top family restaurant menu items, by nutritional claim, Q3 2007-Q3 2009

Eliminating the veto factor

RESTAURANT USAGE OVERVIEW

Key points

Restaurant usage

Figure 39: Restaurant usage in last year, by selected demographics, July 2009

Restaurant usage, by segment

Demographic analysis

Figure 40: Usage of restaurant segments in past three months, by gender, July 2009

Figure 41: Usage of restaurant segments in past three months, by age, July 2009

Figure 42: Usage of restaurant segments in past three months, by household income, July 2009

Figure 43: Usage of restaurant segments in past three months, by presence of children in household, July 2009

Consumer question explanation

FAMILY RESTAURANT USAGE

Key points

2000-08 usage trends

Figure 44: Usage of “top 6” family restaurants, 1999/2000-2007/08

Family restaurant usage

Figure 45: Usage of leading family restaurant chains, by restaurant, July 2009

Demographic analysis

Figure 46: Usage of leading family restaurant chains, by restaurant, by gender, July 2009

Figure 47: Usage of leading family restaurant chains, by restaurant, by age, July 2009

Figure 48: Usage of leading family restaurant chains, by restaurant, by presence of children, July 2009

FAMILY RESTAURANT USAGE—IMPACT OF RACE AND HISPANIC ORIGIN

Key points

Family restaurant usage by race/Hispanic origin

Figure 49: Top family restaurant usage, by restaurant, by race/Hispanic origin, October 2007-December 2008

Acculturated versus non-acculturated Hispanics

Figure 50: Top family restaurant Hispanic usage, by restaurant, by degree of English spoken in home, October 2007-December 2008

FAMILY RESTAURANT USAGE AND KIDS

Key points

Parents take kids to family restaurants

Figure 51: Likelihood of children going with parents to pizza, family and casual restaurants, July 2009

Figure 52: Likelihood of children going with parents to family restaurants, by selected demographics, July 2009

FAMILY RESTAURANT DECISION INFLUENCERS

Key points

Competitive analysis: Pizza, family, and casual restaurants

Figure 53: Pizza, family, and casual restaurant decision influencers, July 2009

Demographic analysis: Influencing factors for choosing family restaurants

Figure 54: Family restaurant influencers, by gender, July 2009

Figure 55: Family restaurant influencers, by age, July 2009

FAMILY RESTAURANTS: REASONS CONSUMERS CHOOSE THEM

Key points

Competitive analysis: Pizza, family and casual restaurants

Figure 56: Reasons to eat out at pizza, family and casual restaurants, July 2009

Demographic analysis: Reasons consumers eat out at family restaurants

Figure 57: Reasons to eat out at family restaurants, by gender, July 2009

Figure 58: Reasons to eat out at family restaurants, by age, July 2009

FAMILY RESTAURANTS: USAGE BY DAYPART

Key points

Breakfast differentiates family restaurants

Figure 59: Restaurant mealtimes, daypart, by segment, July 2009

Figure 60: Family restaurant mealtimes, daypart, by gender, July 2009

Figure 61: Family restaurant mealtimes, daypart, by age, July 2009

FAMILY RESTAURANT USAGE BY PROCUREMENT METHOD

Key points

Competitive analysis: Pizza, family, and casual restaurants

Figure 62: Pizza, family and casual restaurant delivery, pickup and dine-in purchases, July 2009

Demographic analysis: Procurement method at family restaurants

Figure 63: Family restaurant delivery, pickup and dine-in purchases, by age, July 2009

APPENDIX: ADDITIONAL CONSUMER TABLES—INCOME

Figure 64: Usage of leading family restaurant chains, by restaurant, by household income, July 2009

Figure 65: Reasons consumers eat out at family restaurants, by household income, July 2009

Figure 66: Family restaurant delivery, pickup and dine-in purchases, by household income, July 2009

Figure 67: Family restaurant mealtimes, by household income, July 2009

APPENDIX: TRADE ASSOCIATIONS

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