For consumers looking to reduce their spending this holiday season as prices continue to rise, dining out is the indulgence that they are most ready to cut back on.
By the Numbers
Research from PYMNTS’ recent study “New Reality Check: The Paycheck-To-Paycheck Report — The Holiday Shopping Edition,” created in collaboration with LendingClub, draws from a survey of more than 3,400 U.S. consumers about their holiday season spending. This study finds that 29% of consumers will spend less on restaurant purchases this season than they did last year.
This share is greater than said the same of any other kind of purchase. A slightly smaller 27% reported that they will reduce their entertainment and leisure spending, and 26% said the same of retail shopping. Meanwhile, only 22% said that they would reduce their travel spending, and just 17% expect to cut back on grocery shopping.
How Restaurants Are Responding
Noting consumers’ price sensitivities, brands have been turning to their rewards programs to maintain engagement in the face of these concerns.
For instance, on a call discussing McDonald’s third-quarter 2022 financial results last month, CFO Ian Borden noted that, since the brand’s loyalty program launch, digital customer frequency has been on the rise every quarter.
“Each reward a customer redeems and each preference of customer shares on our app helps power our personal touch,” CEO Chris Kempczinski added. “We are using this deeper understanding of our customers to create relevant content and offers through the channels they prefer. By tailoring messages, our customers feel more connected to McDonald’s, ultimately driving engagement and increasing frequency.”
Similarly, quick-service restaurant (QSR) giant Starbucks has been driving sales with both its own rewards and with cross-brand perks.
“Starbucks Rewards continues to deliver value to our customers, enable customer connection and drive our business,” Interim CEO Howard Schultz told analysts earlier this month. “And despite its global scale and growth, we have significant untapped opportunities to grow our Rewards program in a very unique way. We recently launched our Reward Together program, enabling a select group of leading brands to partner with us by linking their loyalty program to Starbucks Rewards.”