Restaurant Marketing Group, ZenMango's restaurant focused division, has completed their annual Leaky Bucket study for 2009. This year's study is the largest to date, and includes 160 national and regional restaurant brands for the most comprehensive competitive outlook in the industry.
The Leaky Bucket study is focused on customers who try a brand but state they are unlikely to return to the brand. The higher a brand's Leaky Bucket percentage, the more customers the brand is losing.
People are abandoning restaurants faster in 2009 than 2008. The restaurant industry is at a crossroads. People are not returning to restaurants where they have eaten in 2009 the way they did in 2008.
The restaurant industry's 2009 Leaky Bucket average is up 7% from one year ago to 36%. This is the highest average percentage recorded in the history of Restaurant Marketing Group's Leaky Bucket annual evaluation. In addition, an average of 36% of those who fall into a brand's Leaky Bucket cite the price/value of the restaurant as a primary reason for not returning to the brand. Price/value as a reason for not returning is up 11% from 2008, the area with the largest increase in the study.
Many casual brands also struggle with value perceptions, especially at lunch, accounting for a 39-percent price-value leak score, Sen said.
“They’re doing what’s ‘price-value-relevant’ for dinner,” he said. “If we want to use the best deal, Applebee’s ‘2 for $20’ deal, it’s still not relevant for lunch. It’s very tough for them to compete with fast food and fast casual, especially the sub sandwich [category]. In three to five years, Subway’s $5 footlong and Quiznos’ $4 Toasty Torpedo will be seen as a defining moment. [Those deals] move traffic away from both fast food and casual dining.”
The takeaway for the restaurant industry is to understand that consumers are searching for something beyond "whatever is closest." The brand which demonstrates the best guest experience will dominate a consumer's choice set.
Check back for individual brand highlights from all categories included in the study. Below is a sneek peek at what the industry as a whole looks like in 2009 compared to 2008. Or, go to our website to download a free Leaky Bucket industry overview report.
Industry Average: Changes vs. One Year Ago | ||||||||
| Leak Size | Food | Menu | Atmosphere | Price/Value | Location | Service | Family Friendly |
2009 Industry Average | 36% | 25% | 17% | 19% | 36% | 36% | 23% | 13% |
2008 Industry Average | 29% | 25% | 17% | 15% | 25% | 43% | 13% | 10% |
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Change vs. 2008 | 7% | 0% | 0% | 4% | 11% | -7% | 10% | 3% |
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