- Among six countries RMS surveyed, French diners are an exception: They are spending the same amount or more of their disposable income on FAH.
- Macroeconomics plays a large part in France’s unique dining perspective, but there are lessons for operators not in France.
As we enter the second half of the year, RMS checked in with six of our core markets to get a pulse on guest behavior and insights within each. Using data gathered from RMS surveys conducted in the United States, United Kingdom, Italy, France, Germany and Spain, RMS analysts and data experts have gathered their findings, which we will be sharing on our blog and on an upcoming episode of Revenue Stream.
Pricing and Value Perception in France
First stop: France. Nicolas Bordeaux, VP of International Finance at RMS, and Emmanuel Dechet, Consultant, took a deep dive into the survey findings and uncovered insights about the state of dining in France and what learnings might benefit other countries. You can access the entire “Restaurant Consumer Insights 2022 France Edition” report here.
France Is Happiest About Meals Away From Home
Some of the findings were universal. Across all countries, most guests believe the restaurant industry is better off now when compared to 2021, yet responses also indicate more awareness of price increases.
However, here is where France differs from the other five geographies. When asked if restaurant prices were higher or much higher month over month (MoM), less than half of French respondents said they were paying more. In contrast, 64% of respondents in the US, UK, Spain, Germany and Italy said they were paying more to buy food away from home (FAH).
To combat rising prices, one would imagine that guests are spending less of their disposable income on restaurants. You’d be right — except in France. Among the six countries surveyed, France showed the smallest decrease in the amount of disposable income on FAH. In fact, almost 3 in 4 French respondents are currently spending the same amount or more of their disposable income on restaurants compared to 2021.
But why is that? What’s causing the FAH anomaly in France? According to Nicolas, in large part, it comes down to societal factors. “Restaurants are an important part of French culture, and disposable income (which decreased less here than in other countries) was more likely to be used for going out when this was an option again,” he explains.
For those that did report spending less, 40% are choosing less expensive restaurants as a way to save. This may explain why 11% of respondents stated they had visited QSR restaurants more often over the past month, compared to those who visited fast-casual (8%) and full-service (6%) restaurants more. Emmanuel attributes some of this shift to menu range and marketing. “Some customers are trading down to less expensive items which are typically plentiful at QSRs,” he says. “Others are taking advantage of coupons and promotions, which are not as common at full service.”
While QSR visits may be up, drive-thru is down, with 50% of respondents saying they planned on ordering at the drive-thru less often. But there is overall good news — 1 in 3 plan on dining out more in the future, even though 39% consider dining out at restaurants a luxury.
Control What You Can, Watch the Competition
Nicolas and Emmanuel agree that macroeconomics accounts for the current climate among diners in France. Nicolas says, “The French government has taken drastic measures to limit the risks of bankruptcy among restaurants with public loans and has worked on a radical plan to support demand and limit inflation.”
Some of these measures included a massive furlough plan that protected employees in private and public sectors; a minimum wage tied to inflation (wages increase automatically as inflation grows); and public financial support from the government, which allowed many restaurants to invest in renovations.
As a result, very few chains or operators in France went bankrupt. Competition remained high, and restaurant owners were reluctant to increase prices.
Granted, QSRs outside of the country would be hard-pressed to create similar outcomes without government aid, but, says Nicolas, “The guidance RMS gives our clients in France is applicable to operators no matter the country.”
When in France – Universal Advice to QSRs
- Study what your competitors are doing and look carefully at their performance and actions, historical and post-COVID, benchmarking against your data.
- Take a consumer-centric approach to pricing.
- Avoid making large pricing increases, particularly all at once.
- Protect and maintain brand image by maintaining or adding entry-level menu items.
- Invest in environmental and infrastructure upgrades and renovations, as appropriate.
RMS supports more than 100,000 restaurants, analyzing data across more than 40 countries, all in support of a singular goal: increasing profits and margins for brands and their operators, wherever in the world they may be.
RMS is here to support restaurant brands. We remain committed to equipping you with a path forward — informed by data. Reach out to us today for practical strategies designed to optimize menu profitability, sales and financial health.