The Biggest Challenge For Fast Food Is Understanding Consumers

The Lempert Report
November 27, 2018

According to researcher NPD Group Inc. the latest peak in restaurant-going was in 2000, when the average American dined out 216 times a year.

That figure fell to 185 for the year ended in February.  Eighty-two percent of American meals are prepared at home -- more than were cooked 10 years ago. 

Bloomberg reports that restaurants are struggling with higher labor and rent costs that they’re passing along to customers, which in turn makes home cooking more economical. McDonald’s, Jack in the Box Inc.Shake Shack Inc.and Wendy’s Co. have all raised prices in the past year. For McDonald’s, the world’s biggest food chain, fewer U.S. customers offset increasing numbers in the rest of the world, resulting in a second-quarter global guest-count drop of 0.3 percent, the burger seller said in July.

While going out to eat has always been pricier, the gap between restaurant eating and home cooking is widening, making supermarkets look even cheaper. That’s an especially appealing prospect for budget-conscious millennials, who are starting families.

Meal kits and grocery delivery make it easier to eat at home.  

“Ten years ago, you had to chop your own onions,” said Bloomberg Intelligence analyst Jennifer Bartashus. “Today, you can go into any grocery store and most of them sell pre-chopped fruits and vegetables. If the biggest driver for eating out was that it’s simply more convenient, that problem is now being solved by a variety of different products and services.”