Restaurants are something that just about everyone takes the time to enjoy at some point in their lives. Some demographics are more likely to frequent restaurants than others, so it is important to know what core demographic you’ll want to target as a restaurant owner so that you can create stable revenues for your business.
People between the ages of 18 and 29 at fast food restaurants at least once per week.
Because restaurant food is available in quick service formats, informal formats, and more formalized sit-down locations, every demographic has something that will find something attractive about the industry. This forces each restaurant to identify specific core demographics to target in each community so that the best promotional strategy possible can be implemented.
Psychographics Prove There Isn’t a Typical Restaurant User
- People who work longer hours on average each week tend to eat at restaurants more often than people who have more free time at home.
- When asked, working wives tend to prefer eating at restaurants more often than wives who work from home.
- People born before 1977 tend to prefer purchasing restaurant food that has a good perceived value over the location of the restaurant or other factors.
- People who live in smaller households tend to eat at restaurants more often than people who live in larger households.
- Parents who have adult children living outside of their home tend to eat out more than other households and they also spend up to 65% more when they do eat at a restaurant.
- Higher levels of income directly correlate to higher restaurant patronage frequencies.
Just about everyone at any age or any socioeconomic status will find themselves at a restaurant at least once per year. Many will find themselves eating at a restaurant at least once per week. Although there are different restaurant preferences, the fact remains that people are spending thousands of dollars every year for the ability to have a meal that is prepared for them. This is why the restaurant industry is so successful, but knowing who has the most dollars to spend on menu items is also important.
How Much Are People Spending At Restaurants Today?
- People under the age of 25 spend the highest percentage of their food expenditures [46%] on food away from home, but spend an average of $4,073.
- People in the 35-44 age demographic spend the most on food away from home at $7,483, which accounts for 43% of their total food expenditures.
- People in the 75+ age demographic spend the least amount on food away from home, averaging just $3,873 per year. This is also the lowest percentage of food expenditure costs at 32%.
- In the 25-34 age bracket, over $6,000 is spent each year at restaurants, accounting for 45% of all food expenditures.
- In the 45-54 age demographic, 40% of food expenditures at restaurants account for an average spending of $7,230.
- For the 55-64 age demographic, 39% of food expenditures account for $6,068 in restaurant spending every year.
Even when a recession hits, one of the few expenditures that households allow themselves is the ability to eat at a restaurant. Now they might adjust their habits somewhat and prefer a quick service restaurant over fine dining more often, but the emphasis to eat food away from home is still important. This indicates that there is a cultural component a restaurant is able to provide for every demographic around the world. If a restaurant can identify this component in their local neighborhood and create a menu and a marketing strategy that communicates this value proposition, then there is a good chance that they’ll be in business no matter how good or bad the economy happens to be.
Defining the Super Heavy Restaurant Demographics
- 37% of quick service restaurant users, defined as visiting a restaurant 2-6 times per week, are in the 18-34 age demographic.
- 54% of people who eat fast food at least one time per day are also in the 18-34 age demographic.
- Caucasians/Whites spend 41% of their food expenditures on restaurant orders for an average of $2,564 per year.
- Hispanics spend 38% of their food expenditures – an average $2,474 per year – on food away from home.
- 36% of African American/Black annual food expenditures, or an average of $1,721 per year, on food away from home.
- In comparison, Asians spend 48% of their annual food expenditures, or an average of $3,703 per year, at restaurants.
- 90% of Asians, 88% of Hispanics and Latinos, and 72% of African-Americans/Blacks order ethnic food at least once a month from a restaurant. Whites/Caucasians do so as well at a 75% rate.
- 20% of consumers will eat at an ethnic at least 7x per month.
- 84% of restaurant customers say they prefer to eat ethnic cuisine at a restaurant focused on that cuisine, but 3 out of 4 of those customers also like it when an ethnic restaurant offers mainstream food options.
What does this information mean for restaurants? That the most profitable demographic to target is the local Asian community who is between the ages of 35-54. These are the folks that are the most likely to frequent their restaurant on a regular basis. Since ethnic food is a consideration, that can also influence the type of restaurant that is offered to a community. Yet there is also some benefit to marketing to the daily quick service restaurant users and the younger demographics who may not have as much disposable income, but still frequent restaurants on a regular basis.
How Income Affects the Restaurant Demographics
- With an HHI of $20k-$30k, about 30% of food expenditures are spent at restaurants.
- When the HHI is $30k-$40k, that percentage increases to 37%.
- At $40k-$50k in HHI, 38.5% of food expenditure costs are spent at restaurants.
- At HHI levels of $100,000–$119,000, $120,000–$149,000, and $150,000 and up, the food expenditure percentages sit at 45%, 46%, and 50% respectively.
- 84% of restaurant consumers who describe themselves as being “affluent” report visiting a quick serve restaurant at least once per month.
- 89% of people who say they are in the upper middle class frequent a QSR at least once per month. 84% of “working” families and 87% of the lower middle class report the same thing.
- This high level of spending has continued to occur despite the fact that since 2007, the net worth of the average family had declined by 40%.
What this information shows about the restaurant demographics is that it is up to each owner to recognize what the makeup of their local community happens to be. By recognizing who the core demographics are, a menu can be built around the needs of that demographic so the best chance for success can be found. The days of just opening up a restaurant because you’re passionate about a certain type of food are gone. If you want to stay in business, then you must develop a relationship with your local core demographics. By seeing what the median preferences are for each group, you can do just that.
How the Restaurant Demographics Are Changing
- Members of Generation X comprise 17% of the population and spend $125 billion annually on consumer goods, preferring snacks more and the ability to explore new foods.
- Millennials are fast becoming the most influential restaurant demographic and are driving new dining concepts built around a fusion of cuisines, service styles, themes, and technologies.
- 60% of restaurant consumers take pride in having tried different cuisine options.
- Arizona expects to see the largest amount of restaurant employment growth by 2026 at 18.9%. Texas comes in second at 17.9% and Florida is third at 17.4%.
- The lowest levels of projected restaurant employment by 2026 are projected to be in Rhode Island [6.3%], Vermont [6.8%], and Alaska [6.9%].
- The US West shows the greatest potential for sales growth as a geographic demographic, averaging more than 6% growth.
- Nearly 10% of working Americans have a job in the restaurant industry at some level.
- Total US sales from all restaurant demographics is expected to increase by $37 billion in 2016, which is more than all US citizens spend to watch movies at a movie theater each year.
- Total sales in 2016 are expected to reach $783 billion and there are expected to be 100,000 more active locations than in 2005.
The restaurant industry is strong and it is continuing to grow. There are no geographic pockets in the United States that anticipate negative growth in this industry. This makes it an ultra-competitive field for a business to be in, which is why a focus on the restaurant demographics is so important. By recognizing each ethnic, socioeconomic, HHI, and other demographic factors, a menu that is streamlined and focused on those specific needs can be created. When that happens, there’s a great chance for that restaurant to defy the odds and be consistently successful.