Post-Recession Consumers Have Contrasting Mindsets on Spending
CHICAGO -- Consumers are of two different mindsets when it comes to spending -- those that cannot spend freely and those that can ─ and the dichotomy between the two will shape the restaurant industry now and into the future, according to new report by market research company, The NPD Group.
The recently released report entitled, "The Changing Consumer Mindset: What it Means to the Restaurant Industry," shows the broad-reaching effects the recession had on consumer behavior and thinking, and the difference between consumers who are more cautious and control their spending vs. those who are optimistic and feel economically stable.
Three-fourths (76 percent) of the consumers surveyed fall into the cautious, controlled spender group, which includes adults in all demographic groups but skews toward the unemployed, less affluent and retirees. These consumers are still reducing restaurant visits, trading down and ordering fewer items. While they anticipate that they will be less restrictive with their restaurant visits when the economy recovers, they do not expect the economy to recover any time soon.
A smaller group of respondents (24 percent) appear relatively unaffected by the recession. These consumers are optimistic in general and have been less inclined to moderate their restaurant behavior, although this group did trade down in segment visits since 2007. They cross all demographic groups, but are more likely to be employed and live in affluent households.
"There is considerable disparity between the views of optimists and controlled spenders regarding enticement to visit restaurants more often," stated Bonnie Riggs, NPD restaurant industry analyst and author of the report. "Optimists place much more importance on service and a relaxing atmosphere than controlled spenders, who are more concerned with price and value."
According to NPD's CREST service, which continually tracks consumer use of restaurants and other foodservice outlets, the restaurant industry is slowly recovering from two years of traffic declines. For the year ending February 2011, total industry traffic was flat compared to the 3-percent decline experienced in the same period a year ago. NPD's "A Look into the Future of Foodservice" report forecasts the industry to grow less than 1 percent a year through 2019.
"Recovery and growth for the restaurant industry will mean understanding the shift in consumer behavior and realigning strategies with what may be the new normal," said Riggs. "Rather than age largely defining frequency and type of restaurant visited, lingering effects of prolonged unemployment and loss of wealth by many will carry forward in years to come, regardless of age."