spending

Shifting consumer spending and its effect on restaurants

Consumers are cutting back on discretionary spending as they prepare for a possible recession, but have those cutbacks meant less revenue for restaurants? Are Canadians limiting their restaurant visits as inflation continues to soar?

According to a recent study by Capterra,  85 per cent of consumers are worried about the looming recession, and nine out of 10 have adjusted their spending habits. As consumers continue to cut back on clothing, entertainment, and beauty, 67 per cent have also reduced their spending at restaurants and bars.

Many consumers are now focused on finding deals as they try and stretch their dollars, with 80 per cent of participants regularly looking for discounts and 54 per cent doing more research before making a purchase. The study shows that 38 per cent of consumers are doing more couponing, and 40 per cent are participating in loyalty programs more often. These shifting habits mean that restaurants may need to shift, too.

RELATED: The current state of the foodservice industry

As prices continue to climb, there may be an opportunity for restaurants to provide more value and build consumer relationships with a successful loyalty program. Loyalty apps are being used by 75 per cent of Canadians these days, and with these levels of adoption, this seems to be a valuable way to reach restaurant guests.

Customer loyalty has always been important in hospitality, but there is an opportunity for restaurants to stand out by meeting consumer needs. Focusing on growing loyalty member lists, listening to feedback, and engaging with customers are a few of the ways that restaurants can work on boosting loyalty and maintaining their margins. Restaurants that can up their customer engagement, target specific clientele, and add value to differentiate themselves may well come out on top as we navigate through uncertain economic times.