Lower-calorie menu items driving restaurant growth

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Originally published in Nation Restaurant News on February 7, 2013 by Erin Dostal.

Study from Hudson Institute links more healthful offerings to better sales and traffic performance at 21 major chains
Restaurants that have increased their lower-calorie menu offerings have also seen upticks in sales and traffic, according to a study by research organization Hudson Institute.

The study, released Thursday, analyzed 21 restaurant chains between 2006-2011, measuring the amount of “lower-calorie” offerings against the brands’ reported same-store sales and traffic. The study was conducted with support from the Robert Wood Johnson Foundation and included large chains such as McDonald’s, Burger King, Applebee’s, Denny’s, Olive Garden and Outback Steakhouse.

The study defined “lower calorie” as fewer than 500 calories for center-of-the-plate items like sandwiches or entrées; fewer than 150 calories for side dishes, appetizers and desserts; and fewer than 50 calories per eight-ounce serving for beverages.

Overall, restaurants that increased their lower-calorie offerings saw an increase in total traffic of 10.9 percent and a same-store sales boost of 5.5 percent between 2006-2011. Brands that didn’t increase their lower-calorie offerings, or decreased them, saw foot traffic drop 14.7 percent and same-store sales dip 5.5 percent during the five-year period.

“We found that those restaurant chains that were growing their lower-calorie time on the menu…demonstrate business advantages,” said Henry J. Cardello, a senior fellow and director at the Washington, D.C.-based Hudson Institute Obesity Solutions Initiative. “They’re seeing their same-store sales grow. They’re seeing customer traffic increase.”

The study’s conclusion is that a shift to lower-calorie and better-for-you foods will be necessary for growth within the restaurant industry. “This is strictly business,” Cardello said. “There’s a good moral argument, but just do it for business. It just makes sense for you.”

He continued, “Consumers are voting with their feet. Nobody’s selling these items very hard. Demand is showing up here. You can’t ignore the consumer.”

Increased menu labeling this year will also add to customer awareness of calorie counts and nutrition, noted Dr. James Marks, senior vice president and director of the health group at Robert Wood Johnson Foundation, during a press conference discussing the findings. “We could see the growth in lower-calorie items accelerate even faster,” he said.

Menus are already beginning to reflect this trend, the study found. Lower-calorie items accounted for 37.5 percent of all servings sold at the surveyed restaurants in 2011 — a 1.3-percent increase from 2006.

Marks also noted that doing “the right thing” and “the profitable thing” for businesses are not mutually exclusive when looking at increasing healthful offerings. “We know that most companies can’t and don’t base their core business model on doing the right thing,” he said. “Rather, they have to make a profit to continue to employ their workers and provide a return for their investors.”

Quick-service restaurants are leading the charge when it comes to lower-calorie food offerings, making up 41.4 percent of all servings in 2011. At full-service restaurants in 2011, 28 percent of servings were lower calorie.

Full-service restaurants, however, offer more lower-calorie beverage options than their quick-service counterparts, Cardello said. 61.6 percent of beverage servings at full-service restaurants in 2011 were lower calorie, compared with 34.1 percent of beverage servings at quick-service chains.

The findings were consistent with the Hudson Institute’s previous study on consumer packaged goods, which found that those companies that focused on offering lower-calorie items performed better.

“If you’re not pushing these items, you’re running the risk of seeing declines,” Cardello said. “It doesn’t mean you walk away from burgers, it just means you restructure the kinds of items you sell.”

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