Toby Smith

Restaurants Hunger for Customers in Downturn

by Toby Smith   11/07/08

The U.S. economy is experiencing a strong downturn as consumers reign in their spending. And one of the hardest-hit sectors has been restaurants as consumers change their eating habits or even stop dining out altogether.

Our latest ChangeWave restaurant spending surveys, which were conducted in September, show that consumers continue to cut back on their restaurant spending.

But in these extraordinarily tough times, which types of restaurant chains are being hit the hardest? And are there any areas showing signs of improvement?

Restaurant Spending Cutbacks Continue in Q4

Restaurant spending has fallen sharply since our previous survey in August. Forty-four percent of respondents said they'll be spending less on restaurants during the next 90 days. Only 6% said they'll be spending more.

Importantly, the year-over-year decline (September 2008 versus September 2007) now stands at an unprecedented negative 29 points.

Consumers Going on a Diet

Twenty-eight percent of respondents reported they'll dine at less expensive restaurants during the next 90 days, while only 3% said they'll dine at more expensive restaurants.

Thirty-three percent said they expect to dine out less frequently during the next 90 days -- four times the percentage who said they'll dine out more frequently (8%).

What reasons are they giving?