Brand-to-brand combat

Despite times being tight, practically the whole of the population of Britain claims to have eaten eat out at some time in the last six months—even if it’s only grabbing a sandwich, pasty or bag of chips.

Peach’s latest BrandTrack research confirms that it’s a habit engrained right across the social spectrum. In difficult economic times, we might have expected frequency to at least have reduced, but no. In this latest round of research, carried out among 5,000 consumers in May, the proportion of those eating-out that claim to do it at least weekly has hit 50% for the first time—and there’s a new high in the proportion claiming to eat out three-to-five times a week, as well. That growth in weekly eating out is across all age groups, with the single exception of the over 55s.

Greater availability and choice, convenience and affordability all seem to be factors. The continuing growth in branded chains, coupled with the spread of value offers, is making it both relatively cheaper and easier to eat away from home. Add in the fact that people want something different to lift them out of the gloom, and you have real consumer demand. But with that is coming greater competition – particularly between brands.

Brand ‘promiscuity’
In the last round of BrandTrack research in November last year, those who eat out were aware, on average, of 28 different pub, restaurant, fast food, coffee shop or sandwich shop brands. They said they would consider eating at an average of 15 of them, and had actually used seven in the last six months.

Six months on and those figures have remained 28 and 15 for the first two questions, but increased to eight for number of brands used. But looking back over two years, it’s a more dramatic picture: then, on average, the public were eating at only around four brands over a six-month period. Brand repertoires have doubled. Despite,
or perhaps because of, the economic climate, brands in the eating market have grown in popularity.

It’s been bad news for the independent sector. As well as this ever-increasing ‘portfolio’ of branded chains being used by out-of-home diners, the major operators have grown market share too. Over the same period the Coffer Peach Business Tracker has shown a steady growth in total sales among the big pub and restaurant groups, as they continue to add sites.

However, with like-for-like sales essentially flat, that brand-v- independent battle is now increasingly becoming brand against brand competition. As more brands and sites come into the market, the consumer has more scope to pick and choose, whether that’s for better value, better quality or a better experience—and the BrandTrack research shows they are doing just that.

This promiscuity means loyalty may be even more difficult to nail down. This is particularly true among more affluent diners.

For the first time, the BrandTrack research has the capability to be analysed by CACI’s ACORN SocialScene groups. This shows larger brand repertoires among the ‘Affluent Active & Urban’ and the ‘Mobile Residents’ groups—both are characterised by above average proportions of young adults and a higher frequency of eating-out than in other ACORN groups. Brands with the highest proportion of these customers include the likes of Wagamama, Jamie’s Italian and YO! Sushi.

Among the younger under-35 London market, for example, the average brand repertoire is 10—and customers of more ‘middle class’ brands can have repertoires well into double figures. That’s were the brand fight for share of wallet is greatest.

Brands are getting better too
But as well as becoming more important to the eating-out market, brands are also getting better, so their customers say.

We’ve tracked the percentage of ‘promoters’, those customers who give 9 or 10 out of 10 for recommendation, across the 44 brands where we have collected data for the last two years—that’s five full cycles—of BrandTrack research. And in our latest round of research, the proportion has moved up sharply from 30% to 35% for those brands together. Two years ago the figure was 29%.

The same situation applies in terms of likelihood to revisit—intentions are higher now than when we started our BrandTrack research. This suggests that brands are now really raising their game in this brand-on-brand fight for market share.

What’s driving this improvement? If we look at the top-box ratings for food quality, by common consent the major driver of customer recommendation, the average rating across all our brands has improved by as much as seven percentage points since last autumn’s round of BrandTrack research. The same applies to the ratings for good service.

As brands get better and attract more users, so the incidence of diners saying they use independent pubs and restaurants has actually declined in the last six months, by around five percentage points in each case, although it’s still high, with 67% using independent restaurants and 65% for independent pubs. Although, that’s still less than those using McDonalds (see below).

The same drop-off is not, however, true for coffee shops, where arguably the price competition from the brands is less intense, and where usage of independents is holding up in this latest research. Independent coffee shop users are, however, about the same number as those that use Costa—around 50% of our sample.

Coffee—it’s hot for the quick serve brands
BrandTrack is also picking up clear evidence of the quick-serve and sandwich sectors’ efforts to drive coffee sales. The incidence of coffee purchasing among brand users at McDonalds, Subway and Greggs, in particular, has increased since last November.

In all, 32% of McDonalds customers now claim to have bought coffee at least once when they visited the brand, up from 29% last autumn. At Greggs the figure has moved from 17% to 21% in the same period.
Among the pub companies, Wetherspoons still stands out, with 25% of its customers who eat saying they drank coffee there. Even among the more ‘foodie’ pub brands such as Vintage and Chef & Brewer the figure is lower, at 21%.

Brands—who’s well set for the future?
Today’s under-25s are the core of tomorrow’s market. In this latest research, this age group accounts for as many as one in four diners in brands such as YO! Sushi and Nando’s, down to less than 10% at Loch Fyne and Brewers Fayre.

For the bigger young-orientated dining brands, Nando’s, Pizza Hut, TGI Fridays and Subway, the reliance on young diners is however lower than we found in our research two years ago—suggesting that their customer profile is maturing.

The difference in brands’ exposure to the buoyant London market is widely different. The proportion of a brand’s users in the capital ranges from around one in three for All Bar One, Garfunkels, Eat and Giraffe, down to 10% and under for Brewers Fayre, Frankie & Bennys, Toby, Wetherspoons and Little Chef.

Beyond basic demographics, BrandTrack contains a wealth of detailed usage and attitude data for brand owners. What becomes very clear is that the exposure that different brands enjoy to the most active and brand-literate customer groups is very different. Looking at the proportion of each brand’s users in those two ACORN groups with the highest frequency of eating out, it ranges from around one in three for Wagamama and YO! Sushi, to around one in nine for Sizzling and Little Chef.

While almost everyone is eating out, delivering the right proposition in a diverse and competitive market is as tricky as ever.

McDONALD'S: LOVIN' IT
McDonald’s current same store sales record is enviable, and its scale is daunting. Incoming CEO Don Thompson recently told the group’s shareholder meeting in the US that the brand is “ensuring that
we have something on the menu for everyone at every price point”.

The evidence is there in our UK research—69% of respondents will consider the brand now, and that’s compared to 59% only six months ago. Two years ago, 43% said they used the brand in the last six months. Now it’s 70%. No other brand comes close. The second-most often-used brand, Greggs, is used by 11% fewer people than McDonalds.

And the brand enjoys regular usage: one in four of its users claims to visits McDonalds’ restaurants at least weekly. Most significantly, 30% of the brand’s users now are ‘promoters’—two years ago the figure was 21%.

Not only that but our evidence is that it serves more different occasions per user than any other brand—the pay-off for the brand’s investment in restaurant remodelling and in menu development. That’s what you call a transformation.

THE RISING STAR—NANDO'S
Nandos has the biggest improvement in prompted awareness among the leading brands and now has more customers than PizzaExpress. See Nando's tops the eating-out popularity stakes.

BRITAIN'S TOP SIX EATING OUT BRANDS
(ranked by % of adults using in last six months)
McDonald's 70%
Greggs 58%
Costa 49%
KFC 49%
Wetherspoons 43%
Subway 41%

BRITAIN'S MOST POPULAR PUB AND RESTAURANT BRANDS
(ranked by % of adults eating at in last six months)
Wetherspoons 43%
Pizza Hut 41%
Harvester 29%
Nando's 26%
Pizza Express 26%
Frankie & Benny's 25%

BRITAIN'S MOST 'ASPIRATIONAL' BIG BRANDS
(% of customers in ACORN Groups B&D 'affluent active and urban' and 'mobile residents')
Wagamama 35%
Strada 32%
Gourmet Burger Kitchen 31%
YO! Sushi 31%
Jamie's Italian 30%

All data here is drawn from the 6th Peach BrandTrack survey of 5,100 consumers, conducted online in May 2012. For more information about the survey and to discover how your company and brands can benefit from its findings, including benchmarking performance and tracking competitor sets, contact Christine Martin on 01704 550383 or christine@peach-report.com.

About SocialScene ACORN The classification segments the population in relation to its eating, drinking and leisure activities and is unique to CACI. Built specifically for the leisure sector, SocialScene ACORN brings together consumer types that offer a similar market opportunity rather than merely representing a similar level of affluence and general demographics. For more information contact Nielsen Harrap at CACI: nharrap@caci.co.uk, 0207 605 6023, www.caci.co.uk.