Across generations, consumers are loath to trade down to restaurants with lower-quality food, even as prices rise, but PYMNTS research finds that Gen Z is the most willing to compromise on taste.
According to a February survey of more than 1,200 restaurant customers carried out for PYMNTS’ “Connected Dining” series, 22% of Gen Z restaurant customers report that they are ordering from restaurants that have lower-quality products in response to rising meal prices. In contrast, only 17% of millennials, 18% of bridge millennials, 10% of Gen X and 2% of baby boomers and seniors said the same.
Certainly, consumers are being challenged to make difficult tradeoffs as restaurant prices continue to climb. Consumer Price Index (CPI) data from the U.S. Bureau of Labor Statistics (BLS) shows that year-over-year restaurant inflation, as of July, is at 7.1%, nearly twice the rate of grocery inflation.
Yet, even with these challenges, food quality is one of the last considerations that consumers are willing to compromise on.
Burger King, for its part, noting this trend, has been looking to push back against traffic declines by investing in quality. Joshua Kobza, CEO of the quick-service restaurant (QSR) chain’s parent company Restaurant Brands International, spoke to this effect on the company’s latest earnings call.
“We’ve done a lot of training that’s very focused on Whopper quality and that actually makes a huge difference,” Kobza said.
Similarly, casual dining chain Red Robin Gourmet Burgers noted on its latest call that it has been focused on maintaining a perception of high quality among the brand’s customers.
“Among these most loyal guests who have visited us in the past month say, 42% agreed food quality has improved, 44% agree burgers have improved and 46% agree service and hospitality have improved,” Red Robin CEO G.J. Hart told analysts.
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