Post-Election, Customers Aren’t Flocking Back to Restaurants as Some Predicted

New survey says 35% of consumers have been eating at home more often in the past 90 days.

Respondents to a Pentallect survey said they have little or almost no discretionary income right now.


Where have all the diners gone? Prior to November 2016, some restaurant industry executives blamed declining traffic on uncertainty over the presidential election. But many of those customers are still staying home to eat their meals, according to a survey of 1,000 diners by consulting firm Pentallect.

As Nation’s Restaurant News senior financial editor Jonathan Maze reports in his recent “On the Margin” blog, the survey found that 35% of consumers say they’ve eaten at home more often in the past 90 days, while only 13% said they’re eating out more often.

Bob Goldin of Pentallect told Maze, “We haven’t seen any evidence that people are returning to restaurants post-election,” even though 47% of people surveyed said they thought the Trump administration would be good for the economy.

“This is a huge drag on the restaurant industry, which is highly dependent on discretionary income,” Goldin said in a Pentallect press release. “In this type of environment, consumers tend to eat at home to save money.”

The survey also found that 46% say they have “very little” or “virtually no” discretionary income. That number applies to people in higher income brackets, Goldin told Maze. “Most research on consumer income asks how much money you make, and if you make more than $100,000, there’s an automatic assumption you’re high income. But that doesn’t mean you have discretionary income. You’re making $100,000 a year but have people in college and health care premiums. That’s a headwind for the industry.”

Goldin noted that, thanks to a bullish stock market and low interest rates, the economy continues to perform well “for the top 20%,” but “for a lot of people, they’re struggling, and that hurts the industry.”

He also noted a glut of restaurants competing for a shrinking share of business. “There’s definitely an oversupply of chain units,” he told Maze. “That doesn’t help. And there are even more venues providing the food. It’s a little bit here and a little bit there.”

But Pentallect still predicts that restaurants will outperform traditional retail stores this year as consumer uncertainty begins to subside and restaurants start finding ways to bring their customers back. In the survey press release, Pentallect’s president, Rob Veidenheimer, adds that “restaurants, especially independents, will benefit by their innovation, flexibility, quality and broad appeal on multiple dimensions.”

Pentallect forecasts that the restaurant industry will grow by 3% to $4, while traditional retail sees growth of between 1% and 2% in 2017.


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