Casual Dining - US - October 2008

Table of Contents

• Scope and Themes
• What you need to know
• Definition
• Resources used for Consumer sections
• Abbreviations and terms
• Abbreviations
• Terms
• Executive Summary
• Casual dining bears the brunt of economic conditions
• Most chains show declines in same-store sales
• Sales growth declines in all segments but Italian shows promise
• Higher-priced steak and seafood segments suffer more
• Desirable demographics lead to higher chance for growth
• Upscale, quality positioning trumps value pricing
• Olive Garden thrives on quality and value positioning
• Ad support continues to be important in maintaining presence of mind
• Ads for Contemporary American concepts fail to stand out
• Age and household income are the greatest determinants of casual dining usage and attitudes
• Personal experience and price are most influential in restaurant selection
• Simple product claims like "fresh" work best
• Curbside pickup and delivery attract desirable demographics
• Market Size and Forecast
• Market size
  • Figure 2: Total U.S. system-wide sales of leading casual dining chains, at current and inflation-adjusted prices, 2005-09
  • Figure 3: Selected casual dining same-store sales, 2006-08
• Competitive Context
• Casual diners downgrading to fast casual and QSR
  • Figure 4: System-wide sales growth of casual dining, fast casual, and QSR chains, 2006-08
• Segmentation Performance
• Introduction
  • Figure 5: U.S. system-wide sales of leading casual dining chains, segmented by menu type, 2005 and 2007
  • Figure 6: Growth rates of U.S. system-wide sales of leading casual dining chains, segmented by menu type, 2006 and 2007
• Segment Performance: Contemporary American
• Crowded segment shows mixed performance
  • Figure 7: U.S. system-wide sales of leading Contemporary American casual dining chains, 2005 and 2007
  • Figure 8: U.S. system-wide units and sales per unit of leading Contemporary American casual dining chains, 2005 and 2007
• Segment Performance: Italian
• Success of segment suggests unmet demand for Italian
  • Figure 9: U.S. system-wide sales of leading Italian casual dining chains, 2005 and 2007
  • Figure 10: U.S. system-wide units and sales per unit of leading Italian casual dining chains, 2005 and 2007
• Segment Performance: Steakhouse
• Outback losing share to smaller competitors
  • Figure 11: U.S. system-wide sales of leading steakhouse casual dining chains, 2005 and 2007
  • Figure 12: U.S. system-wide units and sales per unit of leading steakhouse casual dining chains, 2005 and 2007
• Segment Performance: Seafood
• Red Lobster shows no unit expansion but maintains share
  • Figure 13: U.S. system-wide sales of leading seafood casual dining chains, 2005 and 2007
  • Figure 14: U.S. system-wide units and sales per unit of leading seafood casual dining chains, 2005 and 2007
• Segment Performance: Ethnic
• Ethnic segment grows on unit expansion
  • Figure 15: U.S. system-wide sales of leading ethnic casual dining chains, 2005 and 2007
  • Figure 16: U.S. system-wide units and sales per unit of leading ethnic casual dining chains, 2005 and 2007
• Market Drivers
• Restaurant industry in recession
  • Figure 17: Restaurant performance index: all-items, current situation, and expectations, January 2006-August 2008
• Discretionary income under attack; but upper-middle-income families feel less pain
  • Figure 18: Percentage of income spent on key consumer expenditures, by HH income quintile, 2006*
• Growth in hard times comes from key demographics
  • Figure 19: Changes in spending at casual dining restaurants, by age, July-August 2008
  • Figure 20: Changes in spending at casual dining restaurants, by HH income, July-August 2008
  • Figure 21: Changes in spending at casual dining restaurants, by race/ethnicity, July-August 2008
• Restaurants hold back from passing on full cost increases to consumer
  • Figure 22: Increases in food CPI, 2005-08
• Leading Companies
• Overview
  • Figure 23: U.S. system-wide sales of segment-leading casual dining chains, 2005 and 2007
• Trend analysis: value pricing vs. upscale positioning
• Restaurant Analysis: Applebee' s
  • Figure 24: Indexed likelihood of usage for Applebee' s, by age and income, February 2007-March 2008
• Applebee' s rebrands as a "neighborhood" for broad appeal
• Unit expansion comes to a halt
• Restaurant Analysis: Chili' s
  • Figure 25: Indexed likelihood of usage for Chili' s, by age and income, February 2007-March 2008
• Re-imaging and new menu items seem to lead to recovery
• Sale of restaurants to franchisees reduces risk
• Restaurant Analysis: Outback Steakhouse
  • Figure 26: Indexed likelihood of usage for Outback Steakhouse, by gender, February 2007-March 2008
  • Figure 27: Indexed likelihood of usage for Outback Steakhouse, by age and income, February 2007-March 2008
• Despite strong brand equity, Outback joins the rest in concept redesign
• Restaurant Analysis: T.G.I. Friday' s
  • Figure 28: Indexed likelihood of usage for T.G.I. Friday' s, by age and income, February 2007-March 2008
  • Figure 29: Indexed likelihood of usage for T.G.I. Friday' s, by race/ethnicity, February 2007-March 2008
  • Figure 30: Indexed likelihood of usage for T.G.I. Friday' s, by children in the household, February 2007-March 2008
• Menu expands with value-priced items
• Restaurant Analysis: Olive Garden
  • Figure 31: Indexed likelihood of usage for Olive Garden, by gender, February 2007-March 2008
  • Figure 32: Indexed likelihood of usage for Olive Garden, by age and income, February 2007-March 2008
• Concept offers upscale image at affordable prices
• Aggressive unit expansion continues
• Restaurant Analysis: Red Lobster
  • Figure 33: Indexed likelihood of usage for Red Lobster, by age and income, February 2007-March 2008
  • Figure 34: Indexed likelihood of usage for Red Lobster, by race/ethnicity, February 2007-March 2008
• Menu change and website emphasize freshness of seafood
• Expansion and quality positioning expected after period of brand building
• Restaurant Analysis: P.F. Chang' s China Bistro
• Upscale concept continues to expand menu offerings
• Higher price points suffer as customers seek out value
• Innovation and Innovators
• T.G.I. Friday' s innovates in service and promotion
• Guest recognition program
• Wireless server calls
• Contest for everyday chefs
• Video games at the table
• Advertising and Promotion
• Overview
  • Figure 35: Media expenditures for leading casual dining chains, 2006 and 2007
• Ads for Contemporary American concepts fail to stand out
• Applebee' s
  • Figure 36: Applebee' s: Ultimate Trios Appetizers, March 2008
  • Figure 37: Applebee' s: Talking Apple, January 2008
• Chili' s
  • Figure 38: Chili' s: Friends in Car, January 2008
  • Figure 39: Chili' s: Musical Chairs, June 2008
• T.G.I. Friday' s
  • Figure 40: T.G.I. Friday' s: Right Price, April 2008
  • Figure 41: T.G.I. Friday' s: Championship BBQ, August 2008
• Ruby Tuesday
  • Figure 42: Ruby Tuesday: Restaurant Change, August 2008
  • Figure 43: Ruby Tuesday: Wrong Demolition, August 2008
• Olive Garden offers near-fine dining at affordable prices
  • Figure 44: Olive Garden: Chef' s School, June 2008
  • Figure 45: Olive Garden: Family Tradition, July 2008
• Outback Steakhouse remains distinctly Australian
  • Figure 46: Outback Steakhouse: 20th Birthday, March 2008
  • Figure 47: Outback Steakhouse: Quick Golf Game, June 2008
• Sharper targeting from smaller seafood competitor takes aim at Red Lobster' s general appeal
  • Figure 48: Red Lobster: New Seafood Creations, May 2008
  • Figure 49: Joe' s Crab Shack: $5 Appetizers, January 2008
  • Figure 50: Joe' s Crab Shack: Buckets and Beer, July 2008
• Adspend increases for value deals
• Usage of Casual Dining Restaurants
• Key points
  • Figure 51: Casual dining penetration, by gender, age, HH income and race/ethnicity, July-August 2008
• Usage of Casual Dining Restaurants Brands
• Key points
  • Figure 52: Casual dining restaurant brands' penetration, July-August 2008
• General Attitudes toward Dining Out
• Key points
• Attitudes toward casual dining restaurants
  • Figure 53: Attitudes toward food and dining out, by HH income, July-August 2008
• Attitudes toward diet
  • Figure 54: Attitudes toward diet, by age, July-August 2008
• Factors in Selecting a Restaurant
• Key points
• Factors in selecting a casual dining restaurant
  • Figure 55: Factors in selecting a casual dining restaurant, July-August 2008
  • Figure 56: Factors in selecting a casual dining restaurant, by age, July-August 2008
• Cuisine Types and Menu Items
• Key points
• Cuisine type
  • Figure 57: Preferred types of cuisine, July-August 2008
• Product claims for menu items
  • Figure 58: Attractiveness of product claims for menu items, July-August 2008
  • Figure 59: Attractiveness of product claims for menu items, by age, July-August 2008
  • Figure 60: Attractiveness of product claims for menu items, by HH income, July-August 2008
• Changes in Casual Restaurant Spending
• Key points
• Changes in casual restaurant spending
  • Figure 61: Changes in spending at casual dining restaurants, by gender, July-August 2008
  • Figure 62: Changes in spending at casual dining restaurants, by age, July-August 2008
  • Figure 63: Changes in spending at casual dining restaurants, by HH income, July-August 2008
• Casual Dining Features
• Key points
  • Figure 64: Usage of casual dining features, by HH income, July-August 2008
• Race/Ethnicity: Asian Dining Out Habits
• Key points
• Race/ethnicity
  • Figure 65: Attitudes toward food and dining out, by race/ethnicity, July-August 2008
  • Figure 66: Factors in selecting a casual dining restaurant, by race/ethnicity, July-August 2008
  • Figure 67: Changes in spending at casual dining restaurants, by race/ethnicity, July-August 2008
  • Figure 68: Usage of casual dining features, by race/ethnicity, July-August 2008
• Appendix: Other Useful Consumer Tables
• Simmons usage
  • Figure 86: Casual dining penetration, by gender, age, HH income and race/ethnicity, February 2007-March 2008
• Attitudes toward diet
  • Figure 87: Attitudes toward diet, by gender, July-August 2008
  • Figure 88: Attitudes toward diet, by HH income, July-August 2008
• Factors in selecting a casual dining restaurant
  • Figure 89: Factors in selecting a casual dining restaurant, by HH income, July-August 2008
• Use of casual dining features
  • Figure 90: Usage of casual dining features, by age, July-August 2008
• Attitudes toward diet and attractiveness of product claims by race/ethnicity
  • Figure 91: Attitudes toward diet, by race/ethnicity, July-August 2008
  • Figure 92: Attractiveness of product claims for menu items, by race/ethnicity, July-August 2008
• Appendix: Trade Associations