Restaurants May Gobble Up Tax Rebates, Study Finds

tax rebate checkIf consumers act as they did after the 2001 federal tax rebate, restaurants should see at least a small bump in sales after the new round of rebates starts hitting mailboxes in May, points out market research firm NPD Group.

On the other hand, while NPD has historically seen consumers stick to fairly predictable patterns, the current recession includes factors that could turn out to be wild cards. To wit: Record gas prices, food costs and credit card debt (not to mention home foreclosures) have pushed consumer confidence levels to their lowest points in 15 years.

Still, NPD restaurant industry analyst Bonnie Riggs is cautiously optimistic. Restaurant visits rose by 2% for about six months during and after 2001's rebate mailings, which occurred between July and September, and quick-service and casual dining restaurants benefited most. This time, Riggs notes, the rebates are substantially larger--and beaten-down consumers may feel even more in need of "rewarding themselves with a nice meal out."



Restaurants that want to up their odds should also take note of a separate NPD survey that's soon to be released. This one, called "Greener Menus: Can Environmentally Conscious Menus Also Green the Bottom Line?," finds that nearly half of consumers say that it's important to them for restaurants to be environmentally friendly.

If you need less anecdotal evidence, consider this: NPD tested the appeal of a breakfast sandwich described as having a variety of "green" attributes against the very same sandwich, minus the green claims. The result? Consumers not only perceived the green sandwich as healthier; they were willing to pay a premium for it.

"The combination of high consumer concern for the environment and low consumer awareness of what is actually being done provides an opportunity for restaurants to differentiate themselves," sums up NPD senior manager/report author Kyle Olund. Yes, green ingredients may cost more, and ongoing marketing will be needed to build awareness, but such investments could well pay off in the long run, Olund stresses.

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