Special Report: How Far Is too Far?

Even with high gas prices, consumers will drive as far as 20 miles and spend 30 minutes traveling to a dining destination.

By Scott Hume, Editor-in-Chief -- Restaurants & Institutions, 2/1/2008

High gasoline prices and lower consumer discretionary spending make for a combustible mixture, with away-from-home dining among the categories most likely to be burned.

But although many Americans say they are—or at least intend to be—spending less on dining out during the first half of 2008, they certainly aren’t giving up on food away from home. They simply are rethinking their choices. And that often means choosing restaurants that require minimizing their use of $3-plus gasoline.

R&I’s 2008 New American Diner Study finds 47% of consumers saying that high gas prices influence their dining-out habits. Among that group, nearly 65% simply are eating away from home less often. A nearly equal share (61%) says they are selecting restaurants that are closer to their homes or that are on their usual route between work and home.

That’s a percentage greater than the 46% who say they are trading down to less-expensive restaurant options.

Miles and Minutes

So how far is too far? How far in miles will consumers go and how many minutes will they spend to get there for a meal away from home? The simple answer is: a little more than consumers’ daily commute to work.

The average American’s one-way work commute was 25.1 minutes in 2003, according to the U.S. Census Bureau, a 24-second improvement over the 25.4 minutes spent in 2000. Commute times obviously vary greatly depending on location, with those working in New York City averaging 38.3 minutes and workers in Corpus Christi, Texas, averaging only 16.1 minutes.

Even with higher gasoline prices, consumers are willing to devote more time to getting to a restaurant of their choice than they are to getting to their job. On average, consumers say they will travel up to 30 minutes to dine out.

A 30-minute trip in a congested urban area doesn’t take you as far in miles as the same amount spent driving in a suburban or rural area, so the New American Diner Study also asked consumers how many miles they are willing to travel to a dining destination of their choice. On average, slightly more than 20 miles is the maximum distance consumers say they are willing to drive.

As with the time commitment, this is slightly greater than the average American’s work commute. According to research conducted for ABC News by New York City-based research firm TNS, full-time workers travel 16 miles (or about 26 minutes) to get to their place of business.

Operators should keep in mind that 30 minutes is the average maximum distance consumers say they are willing to spend traveling. More than one-third of diners (36.7%) strongly agree with the statement "I prefer going to a restaurant that is no more than 15 minutes’ travel time from my home."

Dining habits and intentions often differ sharply between weekdays and weekends, and such is the case with travel tolerance as well. More than three-quarters (78%) of consumers say they are willing to travel a greater distance to dine out on a weekend than they are on a weekday.

This is especially true of members of Gen Y (age 26 or younger)—nearly 86% of whom say they’ll go the proverbial "extra mile" to dine out on Saturday or Sunday. Also skewing significantly above average are households with children under the age of 5 (87.4%), households with teenage children (85.1%) and households with an income between $75,000 and $99,999 (85.1%).

Only 65.6% of matures (consumers age 61 or older) say they are willing to spend more time traveling on weekends. Baby boomers also are slightly below the average, although most (76.6%) agree that longer weekend travel times are acceptable.

The Impact on QSRs

Worth asking is how rising gas prices affect restaurants’ best customers. Quick-service restaurants’ (QSR) most devoted following is among members of Gen X (ages 27 to 41), 66% of whom say they purchase a QSR meal once a week or more, compared with 55.1% of all respondents to the New American Diner Study. Twenty percent of Gen X consumers say they have decreased QSR spending in the past year (versus 24.4% of all consumers).

Among those Gen X members who say they cut back, 47.3% say the reason is that they have less money to spend on dining. That’s a higher percentage than for baby boomers (40.6%) or matures (31%) but below the 53.7% of Gen Y members who cite reduced discretionary spending as the reason for their cutback. Gen X members, however, are the least likely to say they are spending less because restaurants are getting too expensive.

Gen X members are willing to travel about 21 miles (slightly above average) or spend about 29 minutes (slightly below average) en route to dine out.

Measured in monetary terms, households with an income between $75,000 and $99,999 are QSRs’ best customers and 25.1% of these consumers say they are dining out less often. Reduced discretionary-spending income is cited as a reason for the decline by only 25.2% of this demographic, however. This group is the most likely to blame its fewer visits on lower perceived value in restaurant meals (28.6%, compared with 17.7% of all consumers).

Full Service Takes a Hit

Consumers in the Gen X and matures demographics are the most-frequent customers of full-service restaurants (FSRs), with about 50% of both groups saying they purchase an FSR meal at least once a week. And 63.8% of households with an income of $100,000 or more make FSR purchases at least once a week, compared with 32.6% of household with an income of $34,999 or less.

Matures are the age group least likely to reduce away-from-home food spending because of higher gas prices, with only 42.5% saying they have done so. However, among matures who have cut spending, nearly three-quarters (74.3%) say they are traveling less and staying closer to home, compared with 51.8% of Gen Y members, 56.6% of Gen X members and 64.3% of boomers.

That doesn’t mean that older consumers won’t travel to dine out. Matures say they will drive about 20.5 miles or spend about 31 minutes traveling—close to the overall averages. High-income households ($100,000-plus) are used to getting what they want and thus are willing to travel as far as 23 miles to get to their restaurant of choice.