The Changing Demand for Dining Out

A strengthening economy, changing labor market, and shifting demographics all impact how, what, when, and where consumers eat. The webinar presented by CokeSolutions and The NPD Group, “Eating Patterns in America 2016,” revealed interesting shifts in consumer behavior when it comes to dining out.

More Demand for Dollars
From beauty products to consumer electronics, consumers are pulled in many directions with opportunities to spend their hard-earned dollars. Overall household income has remained relatively unchanged due to changes in the labor market, household structure, and consumer demographics.¹ As consumers age into their sixties and beyond, their income often remains in the bottom 40% of all household incomes.² For most consumers, medications, education, and health insurance costs are rising and demand a greater portion of household budgets.² Consumers are staying at home to eat — dining out 25 times less each year than they did in 2000.³

Economics and food inflation play a key role in the consumer’s decision to eat at home or dine out.

Factors Keeping Consumers Home
Grocery prices today are approximately .05% lower than they were a year ago, while restaurant meal prices have increased by 2.7%.⁴ Consumers spend almost as much on foodservice (50.1%) as they do to eat at home (49.9%).⁵ Lunch, which has long been a dining out occasion for professionals, is now an at-home occasion 51% of the time.³ The main driver of this change is the reality that many professionals work remotely on either a full- or part-time basis.

Changing Categories
Although Gen Xers and Millennials dine out regularly, the frequency is less than what experts projected, based on past generational behaviors.⁶ Millennials cite their reasons for staying in as budget and the desire to eat healthy.⁷

The line between eating away and at home has been blurred. Meal kits, online grocery shopping, retail foodservice, and restaurant delivery have an impact on restaurant sales. In fact, retail stores, which include convenience stores, now capture about 13.5% of restaurant meals — and nearly 90% of these retail meals are consumed off premise.⁸ Consumers love the time-saving simplicity of meal kits and the take-n-bake options available today. And the convenience of food delivery, which represented about 1.7 billion visits in 2016, dramatically outpaced drive-thru service, which was down by 3% over a four year period.⁹

New Expectations
As economic fundamentals progress and new technology trends gain popularity, eating patterns will continue to evolve. Understanding the drivers for consumer behaviors can help foodservice operators meet new dining demands and expectations.

For more information on consumer sentiment and other topics, sign up for our Refreshing Insights by Coca-Cola.

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^{Sources:
¹ U.S. Census Bureau, September 2015 to September 2016
² Bureau of Economic Analysis
³ The NPD Group, Inc.
⁴ Bureau of Labor Statistics
⁵ USDA/Economic Research Services
6 The NPD Group/CREST®
7 The NPD Group/Healthy at Foodservice Report and The NPD Group/Encouraging More Visits from Millennials Report
8 The NPD Group/National Eating Trends®/years ending February
9 The NPD Group/CREST®, YE May 2016}