Industry News | October 23, 2008

Zagat Finds Consumers Trade Down, Don't Stop Eating Out

Zagat Survey today released the results of its 2009 America's Top Restaurants survey. The guide, covering 1,516 eateries in 45 major markets, is based on 25 million meals experienced by over 145,000 surveyors (53 percent men, 47 percent women). The average surveyor ate out 3.3 times per week and spent an average $34.21 for a typical dinner, a 2.8 percent increase over last year. While this year's survey reflects current hard times, the attached list of top rated restaurants reflects enormous progress in the industry by way of both quality and diversity since Zagat Survey started in 1979.

Given the nation's current fiscal woes, grim news from the restaurant front would be no surprise. However, it has so far exhibited a great deal of resilience. As the survey shows, eating out has become a way of life for many Americans, with 50 percent of all meals prepared outside the home. In short, restaurants have become the family kitchen for the busy two-career families and long working hours mean businesses as often as not foot the bill for eating out. Of course, having business meals be largely tax deductible doesn't hurt.

According to Zagat Survey CEO Tim Zagat, "Americans are still eating out in restaurants, they are just making smarter choices. They're dining in high-end restaurants for lunch instead of dinner, seeking out value prix fixe meals, and taking advantage of more causal neighborhood eateries. Regardless of how the economy is doing, people still have to eat."

Still, the financial uncertainty has had an effect: When asked what effect the weakening economy had on their dining habits, 33 percent said they are eating out less and being more sensitive to menu prices; 28 percent said they are eating in less expensive places, and roughly 20 percent said they are cutting back on alcohol, appetizers and desserts. Only 34 percent of surveyors report being unaffected by the economic downturn.

One result of the economic downturn is an upturn at what we call "BATH" (Better Alternative to Home) restaurants: casual, modestly-priced eateries (pasta-rias, burger joints, BBQs, upscale diners, noodle shops, and myriad ethnics) as well as family-dining chains. This genre buys wholesale and produces meals far more efficiently than home cooks. In city after city, our surveys show that BATHs are by far the fastest growing dining segment. That also helps explain the industry's low overall inflation rate. As we measure it, the average cost of a meal increased by less than half of the Consumer Price Index since 1979.

Across the country, more and more chefs are using fresh, seasonal and sustainable ingredients. This trend spans high-end restaurants to casual local eateries. It's a smart move, since 69 percent of our surveyors--especially those on the West Coast --say that locally grown fare is important to them, and 59 percent say they'd actually pay more for sustainably produced food. In cities like Los Angeles, New York City, and San Francisco, some places are even banishing bottled water--and diners seem to approve: only 10 percent are ordering bottled water and 11 percent have switched to tap. When it comes to low fat, heart-healthy food items, 69 percent of diners say they are important to them and 65 percent agree that trans fats should be banned. In New Orleans and Las Vegas, two of the last major cities not to have banned smoking, this is still a major issue. Recent smoking bans will offer welcome relief to health-conscious diners.

Italian remains the nation's favorite cuisine according to a 26 percent plurality of surveyors. Following close behind is American cuisine (16 percent), Japanese (12 percent), French (11 percent), Mexican (9 percent) and Thai (8 percent).

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