Opinion: Savouring bites

Marcus Kinsey, director of Savanta, looks at how the cost-of-living crisis is impacting restaurants...

As inflation rates continue to rise, the last six months have been particularly tough for restaurants, which are suffering even more than the general economy. Indeed, Savanta’s Grocery Eye report reveals that 60% of customers have cut back their spending on eating out.

With such high prices, it’s no surprise that customers are spending less. However, this price impact is not affecting all restaurant brands in the same way.

Savanta’s BrandVue data suggests that changes in the perception of value-for-money depend on the type of restaurant. We used the ‘bill shock’ measure to see which restaurants are causing surprise with their higher prices, and which ones are not.

High-end restaurants, where customers are used to paying a premium, have actually seen declines in customers getting a susrprise when the time comes to get their wallets out. As costs rise, the premium price tag seems more acceptable.

The reverse, however, is true at the lower value end. Where customers were expecting to get value, they are now getting a big surprise.

So, what’s happening to the impressions of brands that are suffering from increased bill shock? For brands that position themselves as offering value-for-money, on average they have dropped by 2%. So, there is a weakening of brand perception, but not a strong one. This decline is unlikely to have been picked up in brand tracking, but the trend is clear.

With bill shock continuing to be felt, there is a danger that this brand perception continues to weaken over time. There also appears to be a lag from experiencing this surprise to declines in positive brand imagery. This lag shows that bill shock is a leading indicator, and that it may take a few instances to feed through to wider measures.

Behavioural measures have also started to decline alongside bill shock. Consideration has dropped by 3.2% over the last 18 months, indicating that higher prices are impacting where people dine out. However, this hasn’t impacted frequency of visits yet, which remains stable.

Considering the impact of inflation, and how it’s being felt (even at the value end of the eating out market), getting your products and prices right is going to be critical going forward.

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