Pendulum swings back toward on-premises dining

Everyone knows today’s diners only care about ordering food using their mobile apps, then swooping in, grabbing that takeout bag and heading back home to chow down in front of the TV, right?

Not so fast.

The NPD Group has determined that the balance has tipped in favor of customers who stick around and enjoy their meal on the premises. This is good news for the restaurant industry, NPD adds, since guests who dine in spend more than those who grab and go. The firm says dine-in visits bring in $223.4 billion annually for the industry, while off-premises visits represent $200.3 billion.  

On-premises restaurant visits, which have grown for three consecutive years, increased by two percent last year over the prior year; off-premises traffic declined by one percent. For the year ending May 2015, dine-in visits were up one percent and off-premises visits were flat, according to NPD’s CREST research.

Quick-service restaurants, which represent 78 percent of total industry traffic, saw a 5-percent increase in dining room visits last year, the highest gain of all restaurant segments. On-premises casual dining traffic held steady in the year ending December 2014, a period of overall visit declines for the segment. Dine-in visits at family dining/midscale restaurants fell, on the other hand, as did overall visits. 

Why are restaurant customers opting to hang out? Some of the reasons they provide are: Good to get out and meet someone, relaxing, I spent time with my family, fun to do, and I don’t need to worry about anything. These reasons are in line with the “experiential purchasing” trend—the idea that consumers want to do something, not just buy something—that marketers are seeing across consumer sectors. As far as reasons for selecting a restaurant, food that tastes good leads the list, followed by convenience, and service. 

Takeout remains a popular option for many. An National Restaurant Association survey last year found that nearly half of all adults consider availability of takeout and delivery an important factor in choosing a full-service restaurant. 

Don’t expect consumers who dine in to be terribly loyal, either. While 42 percent of on-premises diners say they are "somewhat" loyal to a particular restaurant or chain, 34 percent say they are loyal and 24 percent say they are not loyal at all. Converting them into fans is an opportunity for restaurants. 

“The message for restaurant operators is that on-premises consumers are happier and more profitable consumers,” says Bonnie Riggs, NPD’s restaurant industry analyst. “Treat them right with good-tasting food and the best service and a return visit is likely.”

Contact Megan Rowe at [email protected].
Follow her on Twitter: @restaurantrowe