The Future of FSR


On one of my first visits to a full-service restaurant (FSR) following the lifting of restrictions, everything seemed much as it was before the pandemic. Other than the digital menu and the face masks, nothing else seemed out of place. While waiting for our order to arrive, I started analyzing the other restaurant guests (yes, I do this all the time when I visit restaurants, much to the bemusement of my table guests) and noticed a fascinating reality. There were no children present and seemingly nobody over the age of 35, even though it was only 6 p.m. on a summer weekend evening. I had to know if this was an isolated situation or a trend.

The answer turns out to be a little bit of both. The next day at work, I checked the data and confirmed that 18 to 34 year-olds have declined their restaurant visits the least of any adult cohort since the start of the pandemic. For the three months ending August 2021, The NPD Group/CREST database reports that this cohort has increased its share of FSR visits over the past two years, from 20 per cent to 25 per cent, while the 55-plus age cohort’s share of visits has declined from 40 per cent to 33 per cent.

Double-clicking now into FSR on-premises visits, the shift is more pronounced. The 55-plus age cohort still holds the largest share at about 40 per cent, but its visits have declined by almost half since 2019. The 18 to 34 year-old cohort has cut back only 25 per cent of its visits.

This is consistent with recent NPD Group consumer sentiment studies that reported younger cohorts would be the fastest to return to all market segments as soon as restrictions were lifted. This demographic is also the most likely to continue ordering delivery through mobile apps, especially the aggregator apps. In other words, they are expected to adopt new on-premises and off-premises behaviours due to the COVID-19 pandemic.

This shift in the FSR consumer profile has significant implications for FSR operators. Younger cohorts are more adventurous with their food selections and are more likely to seek out a continuous sampling of new restaurants to fulfill this demand for flavour exploration. To address this, operators need to keep their menus refreshed to encourage younger guests to keep coming back for new experiences. An effective digital-marketing strategy targeting these younger consumers is a must to counteract the perceived lack of loyalty. This digital strategy should include the third-party apps mentioned above, a social-media presence (is your food Instagramable?) and a loyalty program. This cohort may be making more visits to FSR, but they don’t have the spending power of older consumers. By contrast, they tend to spend less per visit and are the most likely to take advantage of a deal.

While older consumers have reduced their visits to FSR, their importance shouldn’t be dismissed. Turning again to our sentiment studies, attracting this cohort will first and foremost require strict adherence to cleanliness and distancing protocols. A focus on fresh, Canadian and locally sourced ingredients will also resonate well with this crowd. And finally, don’t forget this cohort represents one-quarter of all off-premises visits, so be sure to target them in any off-premises initiatives.

What about those families that were absent during my recent visit? It seems this is one trend that has not changed all that much as a result of COVID-19. Family parties have held steady at about 25 per cent of all FSR on-premises visits.

It appears my field study of one downtown Toronto restaurant was not entirely indicative of the overall market. Regardless, our “Future of Foodservice” report projects continued softness in FSR visits until at least 2023, and our CREST foodservice market research confirms the 18 to 34-year-old cohort is going to define the future of FSR dining — only sooner than expected.

Vince Sgabellone is a foodservice industry analyst with The NPD Group. He can be reached at [email protected]

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