Nothing feeds the foodservice bottom line like loyal customers. As the National Restaurant Association reported, repeat customers account for as much as 70% of a restaurant’s revenue.1 These patrons are also more likely to have a higher check average, given survey data that shows a 60-70% probability of upselling to an existing customer, compared to 5-20% for new ones.2
Delivery is often seen as a bright spot during dark times for the restaurant industry. But while it may be responsible for jumpstarting stalled sales, historically the industry has shown strong growth, as the research firm CBInsights reports.1
Consumers who hunger for the speed and convenience of restaurant apps are occupying an increasingly prominent place at the foodservice table. The market research and analytics firm DMI dubs them “mobile reliants”—millennials who have come of age during the rise of digital connectivity and who eat up the at-your-fingertips features (like mobile ordering and payments) of quick service apps.1
In today’s crowded restaurant market, it’s no wonder there seems to be an insatiable hunger for capital investment. A lean operation may be desirable, but attracting ample funding is just as critical.
The foodservice delivery phenomenon continues at a frenzied pace, and restaurant operators, retailers and third-party platforms are stepping up to the plate to capitalize on the trend and feed growing consumer demand.
As digital technology evolves and consumers eat up the ease and convenience of the latest innovations, foodservice operations increasingly lean on virtual reality to lift sales.
More and more consumers these days have foodservice under their thumb—literally. In fact, so many foodies are feeding their need for the speed and convenience of restaurant apps, there’s been a 70% growth in usage, according to survey results from GlobalWebIndex.1
The consumer data and analytics firm found that among a cross-section of foodies (defined as people with a strong interest in food, restaurants or cooking), the percentage of consumers between the ages of 16 and 64 using apps rose from 20% to 34%.1 And the upward arc of usage continues.1
Quick service restaurants continue their shift into high gear, turbocharging sales and outpacing the competition.
According to the financial services company FirstData, QSRs surged high atop the dining segment in 2017 through 1Q18.1 The quick service category posted year-over-year growth of 6.6% in consumer spending—an especially impressive figure when compared with upscale dining, which declined 1.7%.1
It can seem a tall order for foodservice operators to thrive these days. Innovate or evaporate is a suitable mantra, given tight margins, rising labor costs and insistent consumer demand for speed, convenience and exciting new flavor experiences.
A prime example of the shifting foodservice landscape, the rise of subscription meal kits has delivered a blow to the bottom line, siphoning off $5 billion in market share1 and encouraging consumers to eat in and bypass takeout. And in-store meal kit sales from traditional retailers are surging too, jumping 26.5% last year to $154.6 million.2 Spending on meal kits is picking up speed at a rate 3x faster than other channels.2
Ups and downs may be par for the course for independent restaurants, but now they seem to be happening simultaneously.
According to the NPD Group, a leading provider of industry analysis and advisory services, independent restaurants are expected to spend about $39 billion with foodservice manufacturers and broadline distributors this year—even though unit count dropped 3% in fall 2017 versus a year earlier.1