April 6, 2021

What Will an Influx of Discretionary Money Mean for Restaurant Sales?

By Matt Lukosavich
Categories

Spring of 2021 promises to bring an alignment of the financial stars to a lot of consumers. From tax refunds and stimulus checks to extra paydays and the relaxing of some COVID restrictions, the pockets of a lot of U.S. consumers are likely to have more discretionary money than usual in April and May.

As Susan Maurer recently discussed, the anticipated influx has contributed to interest in some big-ticket items like new tech, physical well-being, and home improvement. But historically, an increase in discretionary income like this also tends to lead to an uptick in restaurant sales.

It makes logical sense — why not take the family or a group of friends out for a night on the town if you have extra money and a bit of spring fever?

Historical data also proves it out. Last year’s stimulus payments boosted sales for major restaurant chains by as much as 12% according to research from Revenue Management Solutions. With larger stimulus payments this year coinciding with a majority of Americans anticipating a tax refund1 and many expecting an extra payday in April, the impact to restaurants should be significant.

So, how can restaurant marketers ensure that their tables and kitchens benefit from the additional discretionary cash this spring?

Invite the neighbors.

Of course, restaurants have been hit particularly hard by the pandemic restrictions. That also means there is a good bit of pent-up demand for enjoying a dinner out. Takeout is nice, to a point. But recent National Restaurant Association research shows that a lot of restaurant-goers want the experience of on-premises dining. So, they’re absolutely ready to come back.

But just because you are in the neighborhood does not mean that they will automatically enter your doors. Most restaurant goers — nearly two-thirds of them, in fact — will be looking for somewhere new to try. In this market, it is imperative that your restaurant stands out and that you make a point to invite them in, even (especially!) if they live in or near neighborhoods close to your restaurant locations.

Consumers are particularly interested right now in buying from local businesses and supporting them through and after the pandemic. You know the restaurant business has been particularly affected by COVID-related shutdowns and so do your potential customers. Now is the time to invite them in to eat.

Offer a coupon.

Whatever stigma or appeal coupons may have for you as a marketer, the reality is that 80% of restaurant customers will try a new restaurant solely due to being given a deal. It is a tried-and-true method of ensuring that your restaurant gets a piece of their discretionary spending.

But this isn’t about just discounting your food and experience. It is actually about offering diners, many of whom will be in your restaurant for the first time, the opportunity to experience more of what you have to offer. Our research indicates that most restaurant-goers will reinvest their savings into upgrading their meal to enjoy cocktails, dessert, appetizers, or a pricier entrée. A coupon ensures that they spend in your restaurant and walk away with the best possible experience.

Inspire new experiences.

Of all the things people can do with discretionary money, investing in a great experience tops the list of things they want. In fact, 78% of millennials reported a preference for spending on an experience over purchasing a physical item.

Certainly, the dining experience you provide will go a long way to fulfill this desire. However, you can also encourage new customers to visit by inspiring them with the delightful experience of others. Exposing potential customers to genuine online reviews can help them envision what they will get from your restaurant. More than one-third of diners report being influenced by online reviews to choose a particular restaurant.

Turn April discretionary spending into May restaurant revenues.

At this moment in 2021, the restaurant business has a great opportunity to serve the needs of consumers while capturing a big share of their minds and wallets. Restaurant owners, operators, and marketers have long been an innovative group. And as the world emerges from the COVID shutdowns, that innovative spirit will serve us all well.

To read more about how restaurants can drive and sustain sales even in the toughest of environments, check out this panel discussion with me, Technomic’s Melissa Wilson, and Heather Lalley, editor of Restaurant Business.

Matt Lukosavich has nearly two decades of experience helping to connect brands with consumers. In his current role as senior client strategy manager, Matt is responsible for developing data-driven, client-focused, multi-channel solutions with strategic go-to-market media planning for the restaurant industry vertical. Today, he supports the consumer marketing and planning needs for Valassis accounts totaling more than $100 million.

1 Prosper Insights & Analytics, Monthly Consumer Survey: Feb. 2020.

 

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