- PROJECT HELP
- WHITE PAPERS
New research from Consumer Edge Insight shows a significant increase in business-related meal spending from this year compared to last year.
However, most of this spending went to fine dining and casual dining concepts, leaving quick-service behind, according to Restaurant DemandTracker, a recent survey of restaurant customers in the U.S. It found that the number of business-related meals is up from last year and that average spending on those meals is also up substantially.
David Decker, president of Consumer Edge Insight, said the trend favors fine dining restaurants, which are more likely to be visited for business meals, and casual dining restaurants that are appropriate for those occasions.
"A higher-spending business meal customer is a very welcome development for the high-end but also the middle tier of the restaurant industry," he said. "For fine dining restaurants, one of their core customer segments is starting to visit restaurants more often and is more likely to be trading up to fine dining than a year ago. While this is a smaller customer segment for most casual-dining restaurants in terms of traffic, the higher average spending among this group makes them an important segment to understand and target as much as possible given your brand."
The average total spending on business meals was $55 per week in October 2013, compared to $45 in October 2012. This translates to an average check per business meal of about $18.50 in October 2013, versus $13.50 last year.
That means that a substantial portion of this improvement in check size was driven by a higher degree of trade-up to fine dining among business meal customers. In October 2013, 42 percent of business meal customers visited a fine dining restaurant once a week or more (for any type of meal), compared to 34 percent in October 2012. Over the same time, the number of business meal customers who visited casual dining restaurants once a week or more (for any reason) also increased, rising from 48 percent last year to 53 percent this year.
How limited-service concepts can get more business meal traffic
Within the same time period, Decker said there was a 2 percent increase in fast casual visitation among business-meal customers. In October 2013, 59 percent of business meal customers visited fast casual restaurants (for any reason) once a week or more, compared to 57 percent in October 2012.
There was an even smaller increase when it came to quick-service restaurants. In October 2013, 67 percent of business meal customers visited quick-service restaurants (for any reason) once a week or more, compared to 66 percent the previous October.
"So, the increase we're seeing in the frequency of business meals and average spending per meal is really occurring among table-service restaurants only," Decker said. "This makes sense as business travelers would be more likely to choose table-service meals when traveling for work, in order to take advantage of whatever their company's expense policy permits them to spend on each meal."
To target business crowds, limited-service concepts should consider adding catering and delivery.
"For instance, they might want to promote delivery services in locations with a high degree of business meal activity," Decker said.
Read more about restaurant trends.
Cover photo: ThomasWanhoff
© 2014 Networld Media Group All rights reserved.