Special Delivery

The biggest mistake the foodservice industry could make now would be to take guest loyalty for granted.

By Scott Hume, Editor-in-Chief -- Restaurants & Institutions, 10/15/2007

My father’s birthday invariably was celebrated with dinner at Jayson’s Steak House in Cleveland Heights, Ohio. I say invariably because I can’t recall my family venturing anywhere else. Jayson’s was what now would be called a classic steakhouse: dark wood, heavy furniture and low lighting. It can’t imagine that it was very expensive, but it very much wanted to look the part.

My family’s loyalty to Jayson’s was due in part to the limitations of my father’s palate: He didn’t consider anything other than steak to be celebratory. But because this was during the 1950s and 1960s, the family tradition also was born of limitations in our choices. There wasn’t the bounty of independent and chain choices that awaits consumers today.

Chin’s Pagoda Restaurant was across the street, and it was, indeed, a tall, bright-red pagoda. That and the mysteries of Chinese food were enough to ensure that we never had the nerve to set foot inside. Certainly there were more restaurants nearby, but dinners out were so infrequent that we didn’t collect names of must-try restaurants as my family does now.

Jayson’s Steak House is long gone, but I have been thinking about our dinners there not with nostalgia but with the idea that the restaurant meal as primarily a special-occasion experience could regain strength. The ratio of home to away-from-home food spending increasingly has tipped in the foodservice industry’s favor over the past few decades, and it would require significant lifestyle shifts for Americans to reverse that trend. But signals abound that such shifts are beginning, and the economic indicators suggest these changes may accelerate.

According to R&I’s most-recent New American Diner Study, nearly 20% of consumers already identify themselves as "mostly a special-occasion restaurant patron." And in a recent online presentation, analysts with New York City-based RBC Capital Markets said nearly 40% of consumers are dining out less frequently than they did six months ago. More than half say they expect to further decrease away-from-home spending in the fourth quarter.

The foodservice industry has withstood cyclical recessionary pressures in the past and surely can again, should the economy continue to soften. The National Restaurant Association’s Restaurant Performance Index for August eked out a 0.2% increase over the previous month, with significant percentages of operators reporting gains in same-store sales and customer traffic compared with year-earlier levels.

So while this isn’t a time for panic, it is a good time for foodservice to redouble efforts to ensure that every guest—whether at a company-dining facility or a high-end restaurant—be made to feel that dining out is special. That doesn’t necessarily require decreasing prices as much as it calls for enhancing the perceived value of dining out. The biggest mistake the foodservice industry could make would be to take guest loyalty for granted. There are too many signals that consumers right now take nothing for granted.