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Issue Date: Vol. 47, No.11, November 2007, Posted On: 11/22/2007


Study Suggests Americans Are Eating Out Less Amid Heightened Economic Concerns


Emily Jed
Emily@vendingtimes.net

NEW YORK CITY — Fifty-four percent of Americans said they will eat out at restaurants less over the next three months, according to a survey of 1,000 people released in conjunction with investment bank RBC’s Capital Markets Annual Consumer Conference, attended by some of the nation’s leading restaurant and consumer company executives and investors.

“Volatile stock markets, declining home values, higher energy costs and overall economic concerns are reducing Americans’ appetite for dining out,” said RBC Capital Markets equity analyst Larry Miller.

According to the study, the first of regular quarterly surveys on the restaurant industry to be released by RBC Capital Markets, even 35% of those Americans with higher household incomes ($50,000 or more annually) said they would eat out less, and 62% of Americans making less than $25,000 annually said they would eat out less.

The study showed that Americans already have tightened their belts, with two in five acknowledging that they are dining out less frequently today than six months ago. Consumers who cut back tended to fall into one or more of the following demographics: females, generation Y/baby boomers, household incomes under $50,000, unemployed, Northeast and Southern U.S. The 11% of consumers that said they increased their frequency were predominantly male, age 18 to 29, single and preferring fast food.

According to Miller, concern among baby boomers explains the relative weakness in casual dining, as they are the core users.

Of those surveyed who classified themselves as coffee drinkers (roughly half of all respondents), 35% said they buy their coffee most often at the local coffee shop; 28% patronize Starbucks; 20% buy their coffee at McDonald’s; and 14% classified themselves as Dunkin’ Donuts coffee drinkers.

“As to whether McDonald’s is eroding Starbuck’s market share, the answer is ‘no,’ since the consumers of coffee at these two chains are polar opposites,” said Miller. He advises that Starbucks’ customers are more likely to be female, middle-aged and educated with higher incomes compared with their McDonald’s counterparts. Respondents also were asked about the main factor they use to choose which restaurant at which to eat. Food quality was overwhelmingly the driver of choice by 55%, followed by menu offering at 18%. Price ranked third at 12%, roughly in line with convenience at 10%. “This suggests that the restaurant industry’s aggressive pricing in the past few years was not the cause of its traffic loss,” Miller said.

When asked what they are willing to spend their money on now compared to six months ago, 40% said they were less willing to order higher-priced entrees, appetizers and desserts, compared to 26% who were more willing to do so.

Despite busy lifestyles and irregular schedules, most Americans say they still manage to eat breakfast at home. A full 74% eat breakfast at home, and a further 11% skip breakfast altogether, according to RBC. McDonald’s (7%) is Americans’ leading choice for breakfast out, with most of the remainder (5%) eating at restaurants, coffee shops and other sit-down venues.


Topic: Vending Features

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