Kids seem to be growing up faster and faster these days. Drinking coffee among the teenage demographics is becoming ever more popular. Coffee Houses with cozy seating, good music, and delicious drinks and desserts have become a popular hangout place.
So what do teens value?
Restaurant brands with a value message are gaining teen market share, according to a new study from Piper Jaffray & Co.
Regardless of how much teens spend, the perception of value is growing more important among teens in their decision of where to dine out, the survey found. While taste and menu selection still rank as the factors having the highest influence, value came in third in the latest survey, versus lower rankings of fifth and sixth in surveys taken in 2007 and 2008, respectively, prior to the deepest depths of the recession. Nutrition continued to rank last, as teens said it had the least influence on their dining decisions.
“The perception of spending less further validates our thesis that consumers’ purchasing motivations continue to be value-driven, reflecting the challenging macro-economic environment for the consumer today,” said Piper Jaffray senior restaurant research analyst Nicole Miller Regan.
In an interesting twist, however, the teens said their favorite place to frequent is Starbucks, a brand that initially lost market share as the economy slowed because many consumers did not associate its affordable luxuries with value.
Piper Jaffray’s survey reflects the opinions of more than 11,200 teens, including 1,200 who were surveyed at school and 10,000 who were surveyed online. The average age of respondents was about 16 years old, and the group was almost evenly split along gender lines.
Starbucks was the teens’ favorite restaurant brand, garnering a 12-percent share on the school survey and a 9-percent share online. The survey respondents were asked to write in responses on blank lines, rather than choose them from a list. Following Starbucks on the school-based survey were Chipotle, Chili’s, Olive Garden and McDonald’s. Following Starbucks in the online survey were Olive Garden, McDonald’s and Red Lobster, with Applebee’s and Chili’s tying for fifth place.
“Since the fall 2007 survey – the recession’s start – quick-service and premium-convenience chains continue to rank as the most preferred teen brands,” the Piper Jaffray report stated. “However, there are brands within the casual-dining segment such as Olive Garden, which is notably Darden’s most value-oriented concept, that continues to resonate with teens.”
On the school-based survey, the estimated spending level per week increased for the first time since the beginning of the recession, averaging $14.51, up from $12.62 in the spring of this year and up from $13.64 in the fall of 2008.
The online survey, however, indicated that teen spending on dining out has continued to decrease since the start of the recession, averaging $9.33 per week in the latest survey, versus $11.18 in the spring of this year and $10.84 in the fall of 2008.
In both surveys, more than 50 percent of teens said they dined out at least once per week, most frequently at dinner.
Based in Minneapolis, Piper Jaffray is an international middle-market investment bank and institutional securities firm.