CARDLYTICS, INC. Rising prices are forcing British consumers to change their dining habits, according to a report from advertising platform
Takeaways and casual dining take a hit
While the quick service restaurant sector overall has seen a 13% rise in customer spending since 2022, pizza chains have lost ground. This isn't solely due to price increases, as pizza restaurants' average transaction value rose only 11%. However, consumers are seemingly opting for alternative QSR options like chicken shops and fast-food chains, which have seen average transaction increases of 21% and 18% respectively.
Casual dining restaurants, often considered a discretionary expense, have also been impacted. The report shows a 13% drop in visits and a 7% increase in average spending per visit compared to last year. Upscale dining has been hit even harder, with a further 11% drop in visits.
Burger Chains find sweet spot
Burger chains appear to be benefiting from this shift, with a 17% rise in transaction volume and a 12% overall increase in customer spend.
This suggests some chains, like Honest Burger and Byron, are striking a balance between affordability and a more upscale experience, according to the report.
Changing work habits impact lunch spots
The report also highlights changing consumption patterns due to hybrid work models. "City" lunch spots, traditionally popular with office workers, have seen a 9% drop in visits and a 5% decrease in overall spending due to rising costs and fewer weekday commuters. High-end coffee shops have experienced a similar decline in visits, while on-the-go bakeries have seen a 4% rise in customer spending.
Data-driven strategies key to retention
"When economic conditions are tough, consumers change their spending behaviors in order to get by, and this is especially true within dining,"
"Food and restaurants of all types play a role in everyone's lives, but tighter purse strings mean people are thinking twice about where they visit, which has led to some interesting changes in spending habits. The growth in visits to burger chains and on-the-go bakeries is in contrast to the impact felt by pizza restaurants, coffee shops and traditional 'city' lunch spots. But those on both side of this will need to remain proactive and aware of these changes, whether their objective is to maintain their growth or reverse such trends."
The report suggests restaurants that can adapt to changing consumer behavior and leverage data-driven strategies will be best positioned to retain customers during this challenging economic climate.
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