Millennials are the chosen generation for many marketers because of their sheer number and perceived buying power, but they are not a homogenous group and depending on their age and lifestyles, they use restaurants differently, according to a recently released report by The NPD Group, a leading global information company. For U.S. restaurants and foodservice outlets, Millennials as a group currently represent about 14.5 billion visits and $96 billion in spending, which is 23 percent of total restaurant spend, but the group has cut back in both visits and spending, finds the NPD report.
Older Millennials, ages 25 to 34, who are more likely to have families, have cut back the most on restaurant visits, making 50 fewer visits per person over the past several years, according to the NPD report, “Encouraging More Visits from Millennials”. Younger Millennials, those who are 18 to 24 years old, made 33 fewer visits per person. Annual per capita restaurant spend for younger Millennials is $1,240, which is down $146 per person compared to their spending in 2007, and older Millennials’ annual per capita spend is $1,369, down $213 per person.
NPD finds that the reasons why Millennials are cutting back on visiting restaurants are varied, but first and foremost, is their concern about the money they spend at foodservice, particularly Millennial families with children. They indicate restaurants can be too expensive and that it’s cheaper to eat at home. Millennials say that they are cooking at home more often as many “don’t at all mind to do so,” and about half actually claim to like to cook. In addition to saving money, they feel better about cooking at home because they consider it healthier and it tastes better than what they can get away from home.
“Even with their cutbacks Millennials still make a lot of visits to restaurants and to encourage more visits, restaurant operators need to offer them a ‘good deal,’ which to Millennials means reasonable and affordable items that are of good quality and the right quantity,” says Bonnie Riggs, NPD restaurant industry analyst. “In other words, they not only want to get their money’s worth, they want good food and service.”