With little to no growth forecasted for the restaurant industry in the next several years and consumer frugality being the "new norm," restaurants will need to cater to the needs of their cost-conscious customers to build loyalty and enhance value, according to The NPD Group.

NPD foodservice market research found that, although there were more than 61 billion restaurant visits in 2012, restaurant traffic counts have yet to recover to pre-recession levels, and it's more difficult now for operators and their suppliers to find growth paths in the "new" marketplace of less consumer demand.

NPD's recently released report, "Planning for Growth in the New Normal Marketplace," claims that there is now a different consumer mindset shaped by the hard-hitting Recession from which consumers are still recovering. Now, consumers have less confidence in their employers and their government and are spending less. According to the report, nearly three of every four Americans today consider themselves cautious and controlled in their spending habits.

More recently, the imposed payroll tax increase with its impact on wages, severe weather and rising gasoline prices are all providing added stress. The new consumer mindset has restaurant operators challenged to find ways to rebuild or enhance consumer trust in their brands and in the value of their offerings in order to grow at a faster pace, finds NPD.

The return in building customer loyalty for a restaurant operator is significant, according to the report. For example, NPD's QSR Market Monitor which tracks the correlation between loyalty and visits, finds that loyal quick-service restaurant customers visit twice as often as QSR restaurant switchers. Other advantages loyalty brings include:

  • Higher brand awareness requiring less costly marketing.
  • Loyal buyers bring in other buyers.
  • Loyal buyers tend to be less price sensitive and
  • Loyal buyers have a higher tolerance for mistakes.

"The current new normal marketplace requires operators and their suppliers to develop or realign their marketing strategies to address the needs of today's consumer, like incentives that keep customers happy and deliver perceptions of value," said Bonnie Riggs, NPD's restaurant industry analyst. "It's also important to keep in mind that there are other marketplace growth opportunities to leverage, and there will always be winners, even in a soft market."

Read more about restaurant trends.

Related Content

User Comments – Give us your opinion!
  • Stefan Vlisides
    37622847
    I couldn't agree with this statement anymore."The current new normal marketplace requires operators and their suppliers to develop or realign their marketing strategies to address the needs of today's consumer" We help local restaurant owners do just that. http://www.braviant.com Stefan Vlisides Founder and CEO | Braviant.
  • Pete Kane
    37536134
    Great article. It's exciting to see restaurants build their sales and profile using a solid loyalty strategy. I work in the Atlanta market and represent Fivestars. They have got it right. Simple phone number to register and POS integration. Check us out at www.Fivestars.com . Pete Kane Atlanta, Ga.
Products & Services

See the latest in restaurant POS

http://global.networldalliance.com/new/images/products/1926.png

1926/See-the-latest-in-restaurant-POS

Online Ordering

http://global.networldalliance.com/new/images/products/5931.png

5931/Online-Ordering

PeopleMatter HIRE™

http://global.networldalliance.com/new/images/products/4625.png

4625/PeopleMatter-HIRE

Customized Menu Board Content

http://global.networldalliance.com/new/images/products/6689.png

6689/Customized-Menu-Board-Content

Put your menu in your customers' pocket

http://global.networldalliance.com/new/images/products/1293.png

1293/Put-your-menu-in-your-customers-pocket

Enterprise Reporting & Management

http://global.networldalliance.com/new/images/products/6813.png

6813/Enterprise-Reporting-Management

ExpressNet

http://global.networldalliance.com/new/images/products/ExpressNet_iix.gif

1428/ExpressNet

PeopleMatter LEARN™

http://global.networldalliance.com/new/images/products/4627.png

4627/PeopleMatter-LEARN

Business Performance Management

http://global.networldalliance.com/new/images/products/6413.png

6413/Business-Performance-Management

Free Menu Board Media Player Promotion

http://global.networldalliance.com/new/images/products/6675.png

6675/Free-Menu-Board-Media-Player-Promotion

Fast Casual Executive Summit
Request Information From Suppliers
Save time looking for suppliers. Complete this form to submit a Request for Information to our entire network of partners.