Wednesday 28 September 2022

Report finds coffee chains are tempting customers with faster drive-thru lines

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SAN FRANCISCO, USA – Bluedot, a customer arrival platform that empowers businesses to provide real-time interactions and pickup solutions, released the seventh installment of the State of What Feeds Us report which has kept tabs on consumer behavior and restaurant habits for nearly three years. This latest report uncovers dramatic shifts in consumer restaurant habits due to high inflation, rising menu prices with drops in restaurant visits, and consumers ordering fewer items off the menu. Drive-thru visits, nonetheless, remain strong. The latest research was based on a survey of 1,631 American consumers conducted last month.

The research suggests growing demand for deals and offers as well as value menus, with 3 in 4 consumers admitting they look for discounts more often due to rising menu prices. 2 in 3 are downloading restaurant apps or loyalty programs to find deals and freebies. Dinner deals are more popular than discounts and offers for breakfast or lunch.

For the first time, the report examined consumer sentiment around coffee chains in relation to QSRs and found shorter drive-thru lines could be luring customers away from their go-to fast food restaurants. It’s not just shorter lines, 1 in 2 consumers believe coffee chain drive-thrus are faster. The data also signals they’re buying a lot more than coffee; 53% of consumers consider visiting a coffee chain when they’re really hungry, often without a coffee purchase. When they want a specialty drink as well as fast food, nearly half of consumers say they make multiple stops.

Also for the first time, the report taps consumer sentiment around sustainability. Three-quarters see that restaurants are claiming to be environmentally conscious, but nearly half don’t believe the claims. Consumers do want restaurants to do more with sustainability – 3 in 4 consumers are more likely to visit environmentally friendly restaurants, but only 1 in 3 are willing to pay more for it.

Plant-based might be catching on among restaurant customers. 3 in 10 indicated they’ve tried out plant-based menu items. As for food waste, most (85%) recognize fast food restaurants as major contributors to the country’s food waste problem. 8 in 10 consumers claim they would be more likely to visit a restaurant that takes steps to compost or donate excess food, a potential opportunity for restaurant brands.

Like previous reports, this installment looked at mobile app engagement and found a 6% dip in mobile ordering over the last three months for the first time. Although among high-income earners, there was an increase. Mobile order pickup remains a top frustration for consumers with 1 in 3 unwilling to wait longer than four minutes.

“With high inflation, it’s not surprising to see sweeping shifts in consumer restaurant habits. Increasing demand for priced-right menus via value deals, discounts, and offers certainly presents an opportunity for businesses to not only woo customers but also nurture them into repeat customers, especially through apps and loyalty programs,” said Judy Chan, CMO of Bluedot. “At the same time, companies should be very cautious about over adjustments to portion sizes. Consumers are clearly aware of shrinkflation and it could very well have a longer term, consequential impact on brand perception.”

“Wait time has always been key to successful drive-thru experiences; an element brands have taken seriously and this latest report is a strong reminder of that. Coffee chains with drive-thrus are very well positioned to pick off QSR customers and it will be interesting to see how that plays out in the short and long term as more drive-thrus across categories emerge,” Chan adds.

Highlights from the report include:

Coffee Chains

  • With shorter drive-thru lines, coffee chains are tempting fast food customers. 6 in 10 consumers consider buying food at a coffee chain if other drive-thrus have a long line. Of the 6, 2 already do.
  • There’s a perception coffee chain drive-thrus are faster. Half believe that coffee chain drive-thrus are faster than fast food drive-thrus.
  • Consumers are buying much more than just coffee. When hungry, 53% of consumers consider coffee chains for food. Of those, 41% will consider it without a coffee purchase while 59% will only consider it with a coffee purchase.
  • High-income earners turn to coffee chains for a quick bite. 68% of high-income earners are more likely to consider coffee chains for a quick bite compared to middle-income earners (49%) and lower-income earners (54%).
  • Two-thirds of consumers are willing to make separate stops at fast food restaurants and coffee chains. Of those, 61% would consider it while 39% already make separate stops.
  • Afternoon and daily deals are enticing coffee chains. Top reasons why consumers are more likely to visit a coffee chain after the morning rush include afternoon deals (46%), daily deals (43%), short drive-thru lines (32%), a snack (28%), or a meal (26%)

Pricing Impacts

  • Consumers are wise to shrinkflation. 77% have noticed that they’re paying the same amount of money for smaller portion sizes.
  • Price increases are dramatically changing consumer restaurant habits. 8 in 10 consumers have changed their restaurant habits due to price increases. Top changes include cutting down on fast food (46%), ordering less expensive items (37%), and ordering fewer items (32%).
  • Price hikes have become increasingly apparent. 91% of consumers have noticed pricing increases at restaurants, up from 85% in October 2021.
  • Value menus gain popularity, not because consumers like the options. Nearly three-quarters are ordering off value menus more often due to costs. Of those, 31% are ordering off the value menu but would prefer not to.
  • Sit down restaurants take the biggest hit. Consumers report cutting back on visits to sit down restaurants (50%), coffee chains (47%), and fast casual restaurants (43%).
  • Fuel costs and less money impact restaurant visits. Consumers ranked fuel costs (31%) and less money (27%) as the top reasons why they’ve visited restaurants less often over the past three months.

Deals & Offers

  • Price increases have consumers hunting for fast food discounts and offers. Three-quarters of consumers are looking for deals for fast food more often due to price increases.
  • Consumers take notice of more deals and offers. 1 in 2 consumers report seeing more deals and offers at fast food restaurants.
  • Consumers are downloading more apps and joining more loyalty programs for the discounts and freebies. Two-thirds of consumers are downloading more fast fast food apps or joining more loyalty programs. Of those, 31% are downloading more apps, 32% are joining more loyalty programs, and 36% are doing both.
  • With more income comes more app downloads while middle-income earners are joining loyalty programs. For discounts and freebies, high-income earners are downloading more apps (26%) while middle-income earners are joining more loyalty programs.
  • Dinner deals are most popular. 53% are most likely to look for deals and coupons for dinner compared to lunch (36%), breakfast (8%), or a snack (3%). For Gen Z, coupons and deals for lunch are most popular.

Fast Food + Mobile

  • A slight uptick in drive-thru visits. 91% visited a fast food drive-thru in the past month, a slight uptick from 90% in February 2022.
  • Dip in mobile ordering. 35% reported placing more restaurant app orders than they were three months ago, a 6% drop from February 2022.
  • High-income earners are placing more mobile orders. 44% of consumers making over $100k placed more mobile orders over the last three months compared to 33% of middle-income earners and 34% of lower-income earners.
  • Frustrations grow with mobile pickup. Top frustrations include order isn’t ready upon arrival and still having to wait (42%), having to wait even though order is ready (40%), inaccurate orders (39%), food is cold (34%), and staff is preoccupied upon customer arrival (20%).
  • Consumers remain very impatient. 1 in 3 consumers will only wait 4 minutes or less for mobile pickups before becoming frustrated. Of those, 22% want a wait time of under 2 minutes.

Sustainability

  • Sustainability promises are there, but consumers are skeptical. Three-quarters recognize that restaurants are making an effort to be more environmentally friendly, but nearly half (46%) are still skeptical.
  • Consumers want restaurants to be environmentally conscious, but don’t want to pay more for it. 3 in 4 consumers are more likely to visit environmentally friendly restaurants, but only 1 in 3 are willing to pay more for it.
  • Plant-based menus might be catching on among restaurant customers. 3 in 10 have ordered plant-based menu items.
  • High demand for clean ingredients. 3 in 4 are more likely to visit a restaurant that offers clean ingredients. 1 in 3 are willing to pay more for clean ingredients.
  • Food waste is a known problem. The overwhelming majority (85%) of consumers assume fast food restaurants have excessive food waste.
  • Efforts to reduce food waste could win customers. 8 in 10 consumers indicated they would be more likely to visit a fast food restaurant if the restaurant took steps to compost or give away excess food.

Survey Methodology

The survey was conducted via SurveyMonkey on August 1st, 2022 among a national sample of 1,631 American adults aged 18 and older. Additional methodology can be found within the report.

About Bluedot

Bluedot is a customer arrival platform that empowers businesses to provide real-time interactions and pickup solutions for web and apps. The company’s hyper-accurate location technology identifies exactly when and where a user arrives whether that’s entering a store, pulling into a curbside pickup space, or at a parking lot. Bluedot enables brands to provide timely messaging, proximity offers, automated loyalty identification, frictionless curbside pickups, gamification, and more. Easy to implement, Bluedot is inherently compliant with GDPR and CCPA.

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