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The Azira Team

5 mins read

Chipotle vs. Panera: How QSRs adapt to generational differences in dining behaviors with unique strategies

Restaurants have adapted to massive shifts in consumer behavior in recent years, but those changes also include generational differences.  Across all the top trends in dining – takeout, loyalty programs, the dining experience, and more – there are some marked nuances in how “younger diners” (aged 18-44) and “older diners” (aged 45+) behave. 

Azira’s recent report, The New World of Consumer Behavior: Restaurants 2022, details the differences across generational lines in dining habits, preferences, and loyalties. 

1. Older diners have a stronger preference for the traditional waiter experience:

Although diners aged 18-44 do enjoy or very much enjoy the traditional waiter experience (59%), it is specifically diners 44+ who have an extremely high preference for the traditional waiter experience (83%).

2. Older diners have a greater dislike of QR codes and kiosk experiences:

Younger diners are also more amenable to new technology solutions such as QR codes, though they still don’t prefer it (only 27% say they enjoy it). However, very few older diners find the QR/kiosk experience enjoyable (only 9%).

3. Younger diners place more importance on delivery apps:

Being on a takeout and delivery app is very important for diners between the ages of 18-44, with 48% stating that they’re more likely to order food from restaurants that are listed in takeout and delivery app (compared to just 14% of diners 45+).

4. Younger diners are more actively using loyalty programs:

Restaurant loyalty programs are also less important to older diners aged 45+, who enroll on average in about 2 loyalty programs, whereas younger diners aged 18-44 enroll in 4 loyalty programs on average. Diners aged 18-44 are also more influenced by loyalty programs, with 60% saying they eat out more often at restaurants where they are a part of a loyalty program (compared to 40% of diners 45+). Similar to the use of QR codes and kiosks, these loyalty programs are largely driven by digital technologies, such as mobile apps, and are used less frequently by diners aged 44+.

5. Younger diners visit more brands than older diners:

In addition to participating in more loyalty programs, diners 18-44 also reported visiting more restaurant chains in recent months, saying they visited an average of 5.6 different restaurant brands (compared to 4.4 restaurant brands for diners 45+).

Take two different QSR chains—Chipotle and Panera Bread.

Chipotle is one of many QSR chains which are planning new locations that optimize for drive-thru and takeout. In fact, Chipotle is testing locations which have almost no indoor dining space at all.

On the other hand, Panera Bread is planning on doing it all: expanding off-premises services and also doubling down on the dine-in experience. They want to become a “neighborhood cafe” that appeals to diners of all ages, whether those diners want to order at the counter or use an app.

Both choices lead to very different site selection criteria. A QSR chain with a focus on serving younger diners (i.e. through takeout via mobile and kiosk solutions) might choose small urban locations with minimal indoor space, but are also situated in prime foot traffic paths. 

Panera, whose customer base includes many diners over the age of 44, must keep in mind that base’s preference for a more traditional waiter experience and an aversion towards high-tech, contact-less service. This means restaurants like Panera must plan for locations that incorporate demographic data into site selection, as well as local movement patterns. They need trade areas that can draw in larger crowds, but with enough real estate to build a quality, dine-in experience.

We can see these different site selection strategies in action. While Chipotle has a location in the heart of Downtown San Francisco, its trade area is noticeably narrower than the Panera location in suburban Alameda across the water.

Data and visual generated from Azira Pinnacle

These site differences reflect each brand’s customer base, its generational differences, and its desired dining experiences. Panera is situated in a more age-diverse neighborhood, draws customers from farther away, and even keeps customers there longer—twice as long as the Chipotle location, on average.

Read the report: The New World of Consumer Behavior: Restaurants 2022

How restaurants can respond to generational differences

Restaurants know that it can be difficult to appeal to a wide and varied customer base, while also building a single, cohesive brand. The two priorities can often seem like they are at odds with each other, but there are a few priorities that will serve restaurants well regardless of their demographic breakout.

Prioritize the dining experience & provide personal touches

Restaurants that want to appeal to diners aged 44+ can be creative with this knowledge, by taking non-dine-in options and adding more personal touches similar to a traditional waiter experience. This would have the benefit of appealing to diners aged 18-44 as well, as they too show a preference for a more personalized experience.

Invest in digital experiences that are an extension of your brand
Restaurants need to continue to embrace, and bolster their use of digital technology, often through the use of mobile app offerings, kiosks, social media, and more. This extends to prioritizing loyalty programs to deepen their relationship with customers of all ages, but especially Gen Z and Millennial diners.
 
Deeply understand customers through data

Restaurants should use data – both their own first-party data and also third-party data – to understand who their customers are and what they want. This also positions them best for the future, because customer preferences for how they order and where they dine will change and evolve as the world itself continues to change.

When restaurants combine global dining trends with local demographic data, they can make smart choices about site selection, technology infrastructure, and customer service that ultimately satisfies their customer base while building a one-of-a-kind experience.
 
Want to learn more about trends in dining? Join our Research Reveal: What Diners Want: 5 Top Trends in the Restaurant Industry.

Study Methodology

 

This survey was conducted between February 24-27, 2022 with a total of 508 respondents in the United States, census-weighted by age, gender, income, and region. Additionally, Azira studied pulled human movement data for restaurant locations in Los Angeles, New York, Houston, Chicago, Miami, and San Francisco/Oakland between June 1, 2021 – May 31, 2022. Reports used included Azira Pinnacle’s Estimated Visits, Time Spent, Visitor Home and Work Locations Insights, as well as Azira’s Geosocial Affinity, Estimated Visitors, and Cross-Visitation Reports.