The changing dynamics of lunchtime


By Mark Dempsey
March 15, 2016
The changing dynamics of lunchtime

The Canadian lunch hour as we have traditionally known it is slipping away. More and more people are eating at their desks as they work through lunch – a trend so notable that a growing number of companies have catered food brought in to enable employees to continue working through their lunch period. These changes in the traditional lunch hour have been subtle and gradual, and have happened for a number of reasons. Regardless of the cause, changing dynamics continue to take a toll on Canada’s restaurant industry.

Lunchtime visits to restaurants have been on a downslide for several years. It’s a trend that’s worrisome for foodservice operators, as over a quarter of all commercial restaurant traffic in Canada takes place at lunch. This translates into 1.6 billion visits for the year ending March 2015. In the last year, however, commercial restaurants in Canada lost 2.2 million visits at lunch.

The 2008 recession, with its exceptionally high job losses, really took its toll on the lunch market. Despite an improved employment situation, lunch still is not a growing meal occasion. With some of the steepest losses in lunch traffic occurring since 2013, declines have been widespread, with quick-service restaurants (QSR), full-service restaurants (FSR) and retail all seeing a decline in visits at lunch. The steepest declines have occurred in the QSR arena; this is to be expected as it’s the largest restaurant segment.

Where we lunch

Where we lunch

Not only are visits declining at lunch, consumers are ordering fewer menu items, leading to smaller check sizes. In 2011, the average lunch expenditure was $4.74 and the average order size was 2.9 items per meal.  Since that time, lunch checks have fallen to $4.11 and the average order size has slipped to 2.7 items per meal. Declining average check size, coupled with traffic losses, have resulted in considerably fewer lunch dollars, to the tune of $20 million!

Taking this a step further and looking at the “habitual lunch consumer,” we find that over the past four years, this group has also scaled back the number of visits, resulting in 6.3 million fewer lunchtime visits from this consumer group alone. The habitual lunch consumer group accounts for 34 per cent of all lunch visits. They typically eat out four or more times each month and as such are key in driving growth at lunch.

Lack of growth at lunch … a sign of the times?

This lack of growth at the lunch meal occasion is not unique to Canada – it’s also happening in the United States. Changing lifestyles and time pressures are often cited as reasons for this shift in consumer behaviour.  Recent studies suggest that a hectic, on-the-go lifestyle contributes to skipped meals and not eating as healthily as many would like.  While we are brown- bagging more at lunch than we have in the past, NPD data in the U.S. show that 14 per cent of all lunch meals are being skipped. One question worth asking: have Americans and Canadians truly become too busy for lunch, or are they feeling so pinched financially that they are cutting out what could be perceived as a discretionary purchase?

While external pressures, both social and economic, are likely having an impact on consumers’ lunch restaurant visit patterns, not all restaurants have seen a fall-off in lunch business. This is certainly the case for the “new kid on the block” in Canada – “fast casual” restaurants. Fast casuals are the fastest growing lunch destinations for Canadians. Because the overall lunch market is not growing, the success of fast casuals has been the result of “stealing” visits from other concepts. In the last year alone, fast casuals have earned $27 million at lunch.

A good portion of that growth has come from an ability to garner a higher average check than traditional quick-service restaurants — $2.33 higher!  As if that isn’t enough, they are also attracting visits from that all-important millennial generation. While Millennials in general have cut back on their use of restaurants, they have increased their visits to fast casual restaurants – six out of 10 visits to fast casual restaurants in Canada are by Millennials.

Understanding what is behind the success of Fast Casuals can help operators and manufacturers identify market opportunities. Additionally, knowing why consumers are ordering fewer lunch meals will be an important part of developing products and promotions to drive lunch traffic.

More people are eating lunch at home

As mentioned earlier, changing lifestyles and time pressures are often given as reasons for many of the shifts in consumer behaviour that have occurred in the restaurant industry over the last few years. Another variable is that more people work at home. As communication and information technologies advance, workers are increasingly able to work from home, and many do. Since work often dictates how people organize their lives, changes in work patterns have both economic and social implications. According to the U.S. Census Bureau, in 2010, 13.4 million Americans worked from home, with about 1.8 million here in Canada in 2008 (the most recent year for available statistics). That number is likely much higher today due to continued advances in technology, and the rise in professionals creating second careers after losing their jobs during the recession. It is very likely that the vast majority of these consumers do not go out to restaurants for lunch.

The keys to building lunch traffic

Taken together, these trends leave us with many questions. Have Canadians become too busy for lunch? Are they skipping lunch to save some money? Are there any changes operators can make in order to entice more lunch visits? While these questions are bigger than any one survey, a review of NPD’s CREST® Voice of the Consumer data yields numerous suggestions on how to enhance the lunch experience for customers.  Here’s a look at what consumers told us:

“What, if any, suggestions do you have for this restaurant or eating place that would have improved your experience from yesterday?”

  • Building loyalty / value – Loyalty card; promotions/coupon; lower prices
  • Upping the ante on customer service – Knowledgeable, attentive staff; faster service; accuracy of order
  • Focus on food variety/quality – Keep it fresh; keep it healthy; variety; portion size
  • Getting back to basics – Cleanliness; temperature; drive-through; parking; temperature of food

Even though Canadians are visiting restaurants less frequently for lunch, growth opportunities still exist. Not all concepts have experienced traffic losses at lunch. Those that have been able to meet consumers’ needs have experienced lunch growth despite this daypart’s overall weakness. Understanding shifts in consumer usage and attitudes will help restaurant operators and their supplier partners redefine what consumers want from their restaurant lunch meal experience.

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About the author:

Mark Dempsey is Director, Foodservice Canada for The NPD Group. The NPD Group has more than 25 years of experience providing reliable and comprehensive consumer-based market information and insights to leaders in the foodservice industry. For more information, visit www.npd.com or contact Mark at Mark.Dempsey@npd.com

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