Income Influences Patronage and Attitudes

High-income consumers not only use foodservice more often than lower-income consumers do, they also have a different set of demands.

Consumers’ household income—particularly as it relates to their disposable income—strongly impacts many areas of their life, including where they live, where and how they shop, their daily priorities and intrinsic motivations—essentially their overall lifestyle.

Wealth also influences how and why consumers use foodservice. High-income consumers are about twice as likely as lower-income consumers to use foodservice at least once a week, making them an important demographic for the industry. However, it would be remiss to not examine patronage and purchasing decisions among middle- and lower-income groups to determine how to build incremental sales with these consumers as well.

Technomic’s recent Influence of Income Consumer Trend Report polled consumers of all stripes, then broke them down into Working, Lower-Middle, Upper-Middle and Affluent income groups.

  • Working—Generally consumers who earn an annual household income of $34,999 or less. Those earning up to $44,999 were also included in this group if their household size was larger than two individuals. Those in high-cost areas such as major cities were also included in this group if they earned up to $54,999 and had an even larger household size of three or more individuals.
  • Lower Middle—Consumers who report an annual household income of roughly $45,000 to $74,999. Consumers with even lower income ranges, such as those earning $35,000–$44,999, were included in this group if they lived in a low cost-of-living area or if their households included just themselves or one other individual.
  • Upper Middle—Generally consumers who earn $85,000–$104,999 annually. Those in smaller households, or in lower cost of living areas such as rural, suburban or small city areas, were included in this group as long as they reported an income of at least $65,000–$84,999.
  • Affluent—Generally consumers who report an annual household income of roughly $125,000 or more. Consumers who live by themselves and earn $105,000–$124,999 were also included in this group, while households in this income bracket but with a larger household size or in higher cost of living areas fell into the Upper-Middle income group.

Foodservice Patronage

Affluence is tied to greater foodservice usage; nearly twice as many Affluent consumers as those in the Working group use foodservice more than once a week. Wealthier consumers also source a greater portion of their meals away from home than lower-income consumers, with the greatest gap at lunch. On average, more than two-fifths of Affluent consumers’ lunches, compared to just a third of Working consumers’ lunches, are purchased at restaurants.

Base: 2,000 consumers aged 18+
Source: The Influence of Income Consumer Trend Report

The fact that away from home lunch purchases vary so widely based on consumers’ level of affluence speaks to the importance consumers place on convenient foodservice options at lunch, and a preference to source lunch from restaurants regularly if they can afford to do so. Many lower-income consumers likely can’t afford to purchase food away from home for lunch as often as their higher-income counterparts, choosing to eat at home or bring meals from home more often. Operators may be able to increase incremental traffic and sales at lunch by varying their menus to offer options for consumers on a tight budget. This could be through options that provide greater value, such as combos, or items that are offered at absolute low price points, such as value meals. However, when doing so, operators will want to be sure that these items do not cause core customers to trade down from their usual, higher-priced offerings.

Takeout and delivery usage skews to lower-income consumers, while a significantly greater proportion of meals purchased by Affluent consumers are for dine-in. Consumers with a higher disposable income are also more likely to use technology such as a cell phones or smartphones to place their takeout and delivery orders.

Different Priorities

Low prices are the highest priority for Working and Lower-Middle income groups when choosing a limited-service restaurant for dine-in occasions, while Affluent consumers place greater importance on a convenient location. Low prices are also more important to lower-income groups than higher-income groups at full-service locations, as the chart illustrates.

Affluent consumers place a higher priority on convenience of location than any other income group, for both limited- and full-service restaurant occasions. This data suggests that lower-income consumers sometimes need to go out of their way for the low-cost items they seek, while higher-income consumers are willing and able to pay higher prices to visit a convenient location.

Base: 952 consumers aged 18+ who dine in at these locations
Source: The Influence of Income Consumer Trend Report

Consumers with different levels of affluence cope with time constraints in different ways; lower-income consumers are more willing to trade health for convenience, while higher-income consumers are more likely to multi-task during meals and eat on the go.

Slightly more Affluent than Working consumers say an appealing taste and the use of fresh ingredients are important for limited-service dine-in occasions, suggesting that, to some degree, lower-income consumers associate these qualities with higher prices. Lower-income consumers may assume to some extent that taste and freshness cost more, and as a result likely rate it lower because of their priority on low prices. Meanwhile, for full-service dine-in occasions, Affluent consumers emphasize taste and freshness, while lower-income consumers are more likely than higher-income consumers to place a high level of importance on menu variety.

Higher-income consumers are more likely to seek restaurant recommendations from friends and family; a third of Affluent consumers, compared to a fifth of Working consumers, say they often ask for such recommendations. Higher-income consumers are also significantly more likely than lower-income consumers to utilize computers and smartphones to research restaurant menus online. And twice as many Affluent than Working consumers say they often consult online review sites and blogs when choosing a restaurant.

Priorities do not always differ by income group. Two out of three consumers overall agree that order accuracy and food that tastes just as good as for dine-in are highly important for takeout and delivery occasions; the fact that there are few significant skews by income indicates that these are must-haves for takeout occasions regardless of consumers’ level of affluence.

A Change in Attitude

Just half of Affluent consumers, versus three-fifths of Working consumers, view eating out at full-service restaurants as a special treat. This indicates a significant difference between Affluent and Working consumers’ perceptions and motivations for dining at full-service restaurants. Working consumers have tighter budgets and do not visit full-service restaurants as frequently as Affluent consumers, which is likely why lower-income consumers view these occasions as special events.

Additionally, more than a quarter of Affluent consumers, compared to just a tenth of Working and Lower-Middle consumers, say they eat out at restaurants more frequently than they prepare food at home, confirming that Affluent consumers have a high reliance on and preference for restaurant meals.

Base: 898 (a special treat) and 934 (whenever I want to) consumers aged 18+; responses were randomly rotated
Respondents indicated their opinion on a scale of 1–6 where 6 = agree completely and 1 = disagree completely
Source: The Influence of Income Consumer Trend Report

Wealthy consumers also appear to use restaurants to a greater extent than lower-income consumers as a place to socialize. Seven out of 10 Upper-Middle income-group consumers, and just three-fifths of Working and Lower-Middle consumers, say restaurants are a great place to get together with friends.

Although few consumers actively follow restaurants through social media, those who do are most likely to be from Upper-Middle and Affluent households. Facebook, the leading social media site consumers use to connect with restaurants, appeals to consumers from all levels of wealth. However, Twitter and Groupon, in particular, are used regularly by Affluent consumers.

Two-fifths of Affluent consumers, compared to a quarter of Working consumers, say they prefer restaurants with new or innovative menus, suggesting that unique offerings may help attract higher-income consumers. Several ethnic cuisines, including Japanese, Spanish, Greek and Thai, are especially appealing to Affluent consumers.

Base: 914 (willing to try new foods) and 933 (new or innovative flavors) consumers aged 18+; responses were randomly rotated
Respondents indicated their opinion on a scale of 1–6 where 6 = agree completely and 1 = disagree completely
Source: The Influence of Income Consumer Trend Report

Key Takeaways

Consumers’ level of affluence strongly impacts when and how they use restaurants, and it would be easy to focus on these frequent diners. But while they are very important to the foodservice industry because of their high patronage, they account for just a small proportion of consumers. Therefore, it is important for operators to consider their lower-income customers as well.

Understanding the preferences of consumers at different income levels is key to developing strategies that meet the various needs of consumers, regardless of income.

Darren Tristano is Executive Vice President of Technomic Inc., a Chicago-based foodservice consultancy and research firm. Since 1993, he has led the development of Technomic’s Information Services division and directed multiple aspects of the firm’s operations. For more information, visit www.technomic.com.

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