Gen Z don’t like to eat out too much. Here’s how restaurants drive them away

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According to a recent survey by market research firm NPD Group, people aged 18 to 24 ordered at (or from) restaurants an average of 218 times between February 2021 and February 2022. When Gen X was that age , in 2002, they frequented restaurants 284 times each in one year. And when Millennials were that age, they went to or ordered from a restaurant 244 times in a year.

This is not ideal for restaurants, which want to attract young consumers and turn them into lifelong customers.

“The earlier you can engage with a consumer, the more potential you have to build loyalty and increase frequency over time,” said Robert Byrne, director of consumer and industry insights at the company. Technomic catering consultancy. It’s hard to develop loyalty “once someone gets past that window,” he said.

Young consumers maintain the same pandemic habits as consumers in other demographic groups, but face even more constraints. To try to get them excited about restaurant food, operators are setting up loyalty programs and partnering with young stars – and may have to lower prices.

Why fewer young consumers go to restaurants

Like other consumers, some younger employees are spending more of their working days outside of the office. Without usual commuting, demand for restaurant meals may decline, said NDP food industry adviser David Portalatin. Also, many people have learned to cook during the pandemic, and they’ve retained that skill. “Those are the kinds of things that have made it a little more difficult to drive customer traffic to restaurants.”

And let’s not forget inflation and record high gas prices, which hurt people’s wallets.

Young consumers have even more constraints, he noted, such as spending more on technology, clothing and other items.

“The smart phone has probably been attached to them since they were kids,” Portalatin said. “That drives all kinds of what we call ‘committed consumption,’ whether it’s streaming services, games, or other things that you’ve already committed a certain monthly amount of your budget to.”

The NDP sees this as a short-term problem caused by temporary habits created amid the pandemic, as well as those macroeconomic pressures. “We expect the restaurant industry to eventually recover all of its pre-pandemic traffic volume,” Portalatin said.

But some restaurateurs are concerned that this change in shopping habits portends for future sales, said RJ Hottovy, head of analytics research at Placer.ai, which tracks restaurant visits. They wonder if they “need to change the way they do things,” he said.

And some restaurants are going against the trend.

wings and donuts

The wings are a hit with young consumers.

Chicken wing restaurants like Wing Zone and Wingstop and donut shops like Winchell’s, Yum Yum Donuts and Shipley Do-Nuts receive more visits from Gen Z consumers than other locations, according to Placer.ai, which uses census data to determine the age of clients. visit American restaurants.

Between 13 and 18 percent of visitors to these places are between the ages of 18 and 24, according to research by Placer.ai. Typically, about 10% of U.S. visitors fall into this demographic, Hottovy said.

Foods like donuts and wings tend to be more popular with young people, Hottovy noted. But brands can still appeal to Gen Z customers “even if you’re not in categories that cater well to younger audiences,” he said.

In addition to building a brand that resonates with younger customers, good value for money helps, he said.

According to NPD, consumers aged 18 to 24 consider price the most important factor when deciding which restaurants to try. And to drive more traffic to their stores, restaurants may need to start offering more deals, Hottovy said, even if it hurts their margins.

Other companies use different tactics to try to entice young buyers into the fold.

Loyalty programs, celebrity meals and discounts

Restaurant chains like Chipotle have revamped their loyalty programs.
Restaurants love online loyalty programs because they can use them to learn about their customers’ preferences and market them directly, and of course, increase loyalty. It’s also a way to reach young consumers where they already spend a lot of time: on their phone.
“Gen Z audiences are definitely more active on mobile devices than other generation groups,” Hottovy said, and companies like Chipotle (GCM), McDonald’s (MCD) and Starbucks (SBUX) have all “reorganized” their programs accordingly.
Others, like IHOP, have taken a pun approach. The chain’s loyalty program is called International Bank of Pancakes, and customers earn PanCoins when they spend money through the app. They find rewards in the app’s Stack Market.

In addition to loyalty programs, restaurants are also partnering with celebrities and influencers to get young consumers excited about their food.

McDonald’s, in particular, has had great success with its “celebrity order platforms,” ​​or meals containing a celebrity’s favorite orders. The burger chain has teamed up with Saweetie, BTS and others on limited-time deals.
Such offerings “definitely lean more toward Gen Z and younger audiences,” Hottovy said. Since McDonald’s pioneered the concept, other chains like Burger King (and even Coca Cola (KO)) followed suit. Burger King has teamed up with singer-songwriter Lil Huddy, among others, for special meals. Coca-Cola enlisted DJ Marshmello to help develop a new limited-edition flavor.
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