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B&I vs. The Street vs. Weekly Traffic Patterns

B&I vs. The Street vs. Weekly Traffic Patterns

Operators in B&I regularly grouse about competition from on the street restaurants and from-home lunches, but usually can't evaluate these lost sales in the context of a larger picture. New research from the NPD Group suggests that while such competition is formidable, it experiences some of the same ups-and-downs B&I operators face.

"The challenge facing B&I operators can not be simply defined with a statement like, ‘Large QSR chains are our basic competition,' says Kyle Olund, the senior product manager for NPD Group's CREST OnSite data service. "It is almost always a more complex competitive environment than that."

She points to "competitive replacement" responses from thousands of surveyed consumers who had recently consumed a lunch meal in a B&I location (Figure 1). Asked what other eating place they would have chosen had they not eaten there, "a quarter of them mentioned a major quick service (QSR) or full service (FSR) chain restaurant by brand," Olund says.

"Another 49 percent cited independents, smaller regional chains or local sitdown or fast food restaurants, and 24 percent selected an ‘at home' option, many of them likely meals made at home and carried to work."

Her upshot? "While branded restaurants are a meaningful source of competition, non-branded options should not be underestimated."

Mondays are a B&I Opportunity
Figures 2 and 3 take a different kind of look at workday lunch meal decisions and reflect only meals purchased away from home during the week by those aged 25-64 on their way to or from work in the general population. This weeds out most ‘non-work' lunches from the mix.

Of no surprise to B&I operators, the data show that "the lunch business peaks in mid-week," says Olund. "This is the same for B&I, QSR and FSR operations" (Fig. 2). At the same time, Fig. 2 shows how the distribution of a week's lunch traffic varies for these segments in this age group.

Fig. 3 shows the daily share of lunch visits each has based on survey responses as well as the total number of meal visits that population has in a typical weekday (e.g. the lunch peak occurs on Wednesday, with a projected 33 billion visits by the age group, 14 percent of them captured by B&I locations).

It's important to keep in mind that these statistics provide a look at total lunch foodservice consumption, including that by individuals who do not have onsite dining options at their place of work.

Thus, B&I's share appears much smaller than it is for environments where onsite options do exist. "At a location where onsite options exist, the percentages would look quite different," says Olund.

"Operators should consider the percentages in conjunction with the total number of foodservice visits there are on a given day of the week. Given those numbers, the best opportunity to grow the B&I business overall may be Monday."

Olund believes "the biggest competitive challenge for B&I operators is Friday lunch. That's the day when they have the largest drop off in market share compared to other options. They really have to defend their position—you don't want to give customers any excuse to choose another option."

A main reason for the Friday drop-off is the growth of "flex time" and work-at-home options, says the liaison for a large manufacturer who oversees a dozen operations in the Midwest and Southeast.

She also believes the biggest reason for Monday fall-off "is that employees bring in leftovers from the weekend. Mondays become a habitual ‘brown-bag' day.

The Impact of Flex Time
"In our manufacturing plants, many employees get their 40 hours in by Thursday," she says. Meal promotions can help in some locations "but you have to be careful not to reduce profits since you are working with a smaller base to begin with," she adds.

"This tends to be more common in office environments than in manufacturing, but you see it in both places," agrees Jean Petke, senior employee services coordinator at Eastman Chemical Co. "Many office workers work four 9-hour days with a four-hour day on Friday, which allows them to leave at 11 AM. Why would they stay longer for a meal?"

Peter Alessio, president of Lackmann Culinary Services, says another factor operators need to keep in mind is that time-pressed B&I customers expect to be able to use lunch breaks for more than just meals today.

"We can't lose sight of the need for convenience," he says. "We have to find new ways to make the lunch period experience a quick, painless and satisfying event for the consumer.

"In many cases, that means helping them have enough time during the lunch period to complete a necessary meeting or errand or just get back to the office for a pressing afternoon schedule. A well-presented and packaged, quality grab-and-go meal is no longer a second choice for many of our guests."

Olund argues that while "the Friday game is the hardest," it is the day of the week B&I operators "don't get their fair share of the business."

Contract providers "find themselves between a rock and a hard place" on this issue, says Laura Lozano, facilities manager for food services and global support at Dell, Inc..

"You can try to compensate for the drop in Friday business by offering favorite items and promotions, although some providers respond by cutting costs and offerings. Customers see that and are less inclined to eat onsite, which makes the problem worse.

"Most of our providers operate on P&L contracts and the margins are slim. It's a difficult and constant battle," Lozano concludes.

For information on the CREST OnSite data service, go to or contact Kyle Olund at [email protected]

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