Never underestimate consumer logic

Understanding the consumer is never an easy task, and made even trickier by the current economic uncertainty.

The public always seems to have the ability to surprise. There has even been the suggestion that some people may actually be enjoying the credit crunch.

Enjoyment may be putting it too strongly, but the results of a recent phone-in for BBC Radio 4's You and Yours consumer programme suggested that some individuals see tangible benefits in all the doom and gloom ' if only in pricking their consciences. It was not the result the programme makers were expecting.

Some contributors were saying that it had focussed their minds on such things as energy saving and being too wasteful throwing away uneaten food. Austerity may be bringing out the puritan streak in many of us, and forcing us to be a little more thoughtful in our decision-making.

Can the decades of conspicuous consumption really be giving way to a more careful, even frugal era? That would certainly chime with the underlying, and still pressing, public concerns about climate change and saving the planet.

So what would this mean for the eating and drinking out market?

There is little indication that people want to give up on having a good time when going out. In fact, with money short they probably want an even better experience for their hard-earned cash.

But being profligate is quite another thing, and there may well be some rebalancing of the old health-versus-indulgence equation, where health stretches to include wider considerations than just personal well-being.

Being seen to be 'right-on' environmentally may not be such a bad thing for businesses to be, and actually demonstrating that you care about waste, energy-saving and the like becomes a positive.

Past downturns have suggested that environmental concerns go out the window when finances are stretched. This time might be different.

Our own Peach Factory survey of consumers earlier this year showed that although the majority of eaters-out will be looking for better value in the coming year, around a third of consumers still want a greater emphasis from restaurants and pubs on healthier food options and local sourcing in the future.

A large proportion of the population appears to have no intention of giving up on its day-to-day habits and beliefs even if budgets become more stretched.

The same research showed that around 40% of adults agreed with such statements as 'I like to know where ingredients are sourced' and 'pubs and restaurants have a role to play in reducing obesity'. These are not strictly environmental issues, but do demonstrate a strong undercurrent of concern about what might be called 'ethical issues' among pub and restaurant customers.

Time will tell if worsening economic times will shake people's resolve on such issues. However, they don't seem to have dented the determination of legislators to keep health and the environment up the political agenda.

We have seen it here in the UK with the continued pressure on reducing alcohol consumption. In the United States, where the credit crisis has already had a much deeper effect, New York has pressed on with legislation banning trans-fats and requiring calorie counts on menus. Fast-food and casual-dining chains in the Big Apple can be fined $2,000 for not displaying calorie contents.

Los Angeles looks like being the next to take up the calorie-count initiative with the restaurant industry, and has already introduced a moratorium on new fast-food stores in some of the poorest parts of the city as part of an anti-obesity campaign.

What this all shows is that even financial crises cannot knock certain trends off course, whether government or consumer inspired.

Just as the current downturn is unlikely to cause people to start going out for a pint at their local again, neither is it likely that it will stop them going out for a meal. These two long-term trends ' the decline in pub drinking and the growth in out-of-home eating ' appear set to continue.

The fact that McDonalds, with sales ahead 10% in the first half of the year, last month announced a campaign to recruit 4,000 extra staff in its UK restaurants to cater for the two million more customers a month it expects to be serving is evidence of the latter. People may be trading down, but they are not trading out of the market.

What the financial crunch might do, however, is shape those trends in unexpected ways - such as in the case of the phone-in contributors. Being financially prudent and also being concerned about health and the environment might well go together.

First published in M&C Report, September 2008