On a cold Thursday night, at 7:00, you wait behind your bar, wondering why it’s dead. You begin to question: is it the weather? Did you not market well enough this week? Maybe Instagram is the answer?
If the restaurant industry is a hand me down pair of Levi’s, the changes that are happening right now are the patches that your mom used to sew on the knees when they wore out. As you were growing out of those Levi’s you didn’t want new ones, because those fit you so well, so your mom repaired them with flowers and smiley faces. Now, let’s think of how to make your restaurant stronger and repair it to withstand the changing U.S. culture.
Many restaurateurs are worried about people spending larger chunks of their disposable income on tech upgrades, and less to spend on dining out at restaurants.
And the data shows that may be true, According a new Nielsen Company audience report, adults in the United States devoted about 10 hours and 39 minutes each day to consuming media during the first quarter of 2016. That’s some serious screen time. As their time looking at a screen increases, people become more addicted in a sense to binging and consuming content. Just like every sentence should have a subject and a predicate, this story has a cause and an effect. When consumers become more invested in their shows, they are willing to spend more and more to fill that void, and address that need. And how do you address that need? Well, by subscribing to more, and spending more money.
In December 2016, Nation’s Restaurant News reported on a story about this very topic. They spoke with Gene Lee, CEO of Darden Restaurants Inc., who suggested that new, additional costs are leading some consumers to cut restaurant spending. He brings up that consumers have new expenses than they did 10, even 5 years ago, such as cell phone bills and Netflix charges. His reaction is that with these higher costs impacting consumers disposable incomes, they are looking for cheaper options when it comes to food.
Many are wondering, is he making excuses, or is he on to something? Lets dig deeper. “The US is the world’s largest overall consumer media content & tech market at $369.91 billion in 2014, and led in per-capita user spend with $1,160, although it ranked eighth in annual growth with 5.8%.” The important number to watch here is that each American is spending about $1,160 on average per year on tech. That’s a pretty large number, in a category that did not exist even a few years ago.
Consumers are spending more and more on technology, but how much are they spending on restaurants?
Americans are spending more at bars and restaurants ($54.857 billion) than they are on groceries ($52.503 billion). But, why should restaurants worry then? As you see every day, the industry has been facing an 8+ month slump, and there a plenty of reasons to blame for it. It comes at an intersection of the millennial generation overtaking the boomers, and restaurants lagging to accommodate their preferences.
Before you go out and change your restaurant concept, see what you can patch up to cater to this new generation. They want to spend money at your restaurant, and they like technology, so be visible on social media – but keep your brand strong- because authenticity matters.