Survey: 65% of consumers prefer local restaurants to chains

Diving Brief:

  • Mgold consumers choose to dine in person in the middle of less covid-19 restrictions, while 29% plan to reduce their use of the delivery app in the coming months, according to a survey of 1,000 US consumers from Next Insurance emailed to Restaurant Dive.
  • In the past 90 days, 71% of consumers went out to eat and sat inside a restaurant, while 32% said they had eaten in a restaurant but sat outside.
  • Local non-chain restaurants could be boosted by this change. In the past three months, 27% of consumers have dined at a local restaurant. Seventy-two percent of respondents have spent money at local restaurants, and 65% say they feel better about buying from a local restaurant than from a chain.

Overview of the dive:

Next Insurance’s survey indicates consumers are intentionally choosing family restaurants after two tumultuous years, in which nearly 80,000 establishments closed permanently.

More than half of respondents (54%) had a favorite restaurant closed during the pandemic, but 94% plan to try new local restaurants in their community. This support is partly driven by pent-up demand, as COVID-19 restrictions have disproportionately affected full-service restaurants. In 2019, more than 60% of independent restaurants offered full service, according to CHD Expert.

The independent sector has been losing market share to chains for at least 10 years, but this trend accelerated during the pandemic as smaller restaurants weren’t as well capitalized to survive such a crisis.

But the crisis has highlighted the vulnerability of small businesses, forcing consumers and some competitors to step up support. Domino’s, for example, launched a campaign to help independent restaurants by donating their gift cards. DoorDash has launched a service to provide cash advances to small businesses to pay for expenses.

JHowever, the survey suggests independents may be on the road to recovery. The NPD Group reported that the number of independent restaurants increased by 1% in 2021, with visits up by 12%.

“This survey … highlights a positive trend in consumer behavior – people’s willingness to proactively support local dining establishments,” Suzanne DuFore, director of research at Next Insurance, said in a statement. “As many Americans feel more comfortable resuming their daily activities, we are excited to see the ripple effects this will have on small businesses across the country.”

Yet much of the sector continues to struggle with challenges such as inflation and rising labor costs. Earlier this month, the Senate failed to renew the Restaurant Revitalization Fund, which could put many small restaurants in dire financial straits. Without renewal, the Independent Restaurant Coalition predicts that more than 50% of independent operators could close within six months.

Gladys T. Hensley