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Ravenous for Revenues

Ravenous for Revenues. Total revenues for the US restaurant industry have increased 20.9%, from 2010’s $586.7 billion to an estimated $709.2 billion for 2015, which will be the 16 th consecutive year the industry has increased faster than the overall US economy.

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Ravenous for Revenues

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  1. Ravenous for Revenues • Total revenues for the US restaurant industry have increased 20.9%, from 2010’s $586.7 billion to an estimated $709.2 billion for 2015, which will be the 16th consecutive year the industry has increased faster than the overall US economy. • Despite the industry’s growth, there were 630,964 restaurants in the US during fall 2014, or 1% fewer than fall 2013. Independent restaurants decreased 2% to 343,652 while chains increased 1% to 287,312. • The restaurant industry experienced a strong 1.9% increase in same-store sales during April 2015 and a 1.1% increase during May, which was the 11th consecutive month of same-store sales’ increases.

  2. Where the Eats Can’t Be Beat • According to the Nation’s Restaurant News Consumer Picks 2015 survey, the top 5 limited-service restaurants were In-N-Out Burger, Bruster’s Real Ice Cream, Ben & Jerry’s, Haagen-Dazs and Chick-fil-A. • In the casual-dining category, the top 5 were The Melting Pot, Cheddar’s Casual Café, The Cheesecake Factory, Bonefish Grill and Carrabba’s Italian Grill. • Consumers picked First Watch, Cracker Barrel Old Country Store, The Original Pancake House, Bob Evans Restaurants and IHOP as the top 5 family-dining restaurants.

  3. An Evolving Eating Scene • According to many experts and participants in the restaurant industry, the most-important current trend is consumers’ demand for new fast food items that combine the quick service of a traditional fast-food restaurant and the food quality of fine dining. • This trend has had a profound effect on McDonald’s, the world’s biggest hamburger chain, as 2015 will likely be the first year in the chain’s history that it closes more US locations than it plans to open. • During 2014, US Hispanics’ per capita visits to and per capita spending at restaurants increased 4%, compared to a 1% and 3% decrease, respectively, among non-Hispanics.

  4. Restaurant Tech Trends • As the US population become more tech savvy, more Americans expect all types of restaurants to introduce more technology and in four categories specifically: loyalty programs, free Wi-Fi, online ordering and mobile payments. • In a late-2014 survey from Technomic, Domino’s Pizza was chosen as having the most tech features, including ordering via text, emoji, Twitter, a Samsung Smart TV, app for a smartwatch and Ford vehicles with its SYNC AppLink. • Following Domino’s Pizza, Papa John’s was #2, Pollo Campero #3, Chick-fil-A #4, Pinkberry #5, Ben & Jerry’s #6, The Habit Burger Grill, #7, The Capital Grill #8, Starbucks #9 and Marco’s Pizza #10.

  5. Better Market Targeting • According to Living Social’s December 2014-January 2015 survey of restaurateurs, 64% said they budget more marketing dollars during off-peak seasons and 75% said they spend as much as 25% of their budget during the holidays. • Kanter Media reported that restaurants were #7 in 2014 advertising spending of the top 10 business categories, or a total of $6.46 billion, a 0.1% increase over 2013. • Restaurant’s advertising spending to reach the Hispanic market increased 68% during 2014, to a total of $559 million. McDonald’s, Yum Brands and Wendy’s spent the most dollars in Hispanic advertising for the year.

  6. Expecting Excellent Eats • According to Nation’s Restaurant News Consumer Picks 2015 report, food quality is the #1 attribute among consumers whether the measured metric is gender, age, marital status or household income. • The importance of food quality was never more obvious than the June 2015 announcement from the Food and Drug Administration (FDA) that restaurants would have to eliminate trans fat from all menu items within three years. • Papa John’s International revealed its commitment to higher food quality by announcing during June 2015 a list of 14 ingredients it plans to remove from its menu choices by the end of 2016, such as artificial flavors and colors, corn syrup and sodium benzoate.

  7. Advertising Strategies • With the number of independent restaurants decreasing and the number of chains increasing, recommend that independents need the branding power and market reach of television to remain competitive. • According to research from The NPD Group, Baby Boomers visit restaurants more often than younger adults and no medium reaches seniors better than TV. Restaurants should highlight their healthy menu items and the reduction in saturated fat, cholesterol and sodium. • Since Hispanics spend more monthly time watching TV than African Americans and Asian Americans and tend to visit restaurants as a family group more than non-Hispanics, recommend that restaurants feature Hispanic families and/or testimonials in their TV spots.

  8. Social Media Strategies • With consumers expecting restaurants to offer app-accessible loyalty programs, online ordering and mobile payment options, it is imperative that any restaurant’s Website is converted to a mobile-friendly version. • Instagram reaches 53 percent of Millennials that use it daily. Better engagement occurs with high quality photos and mostly with red and orange colors, at least one daily post, the use of hashtags and posting during early morning and mid-evening of the workweek. • Research has found that restaurants’ most successful type of social media promotion is money savings with a minimum purchase, followed by free food item with purchase and money savings with no minimum purchase requirement.

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