January 26, 2006

New Research from InsightExpress Reveals Link Between Rising Energy Costs and Dining Out Habits

In a recent study of approximately 1000 adult Americans, InsightExpress, a leading online market research firm, has found that rising energy and gasoline costs will impact how often people across the country dine out.

What we see here is reflective of a general price consciousness trend that has been brought on by rising fuel expenses, said John Kaminski, Director of InsightExpress Financial Services Practice. The influence of changing energy costs on dining out habits is strongly related to both income and a persons current dining habits, while location is not really a factor.

Rising energy costs will influence dining out behavior.
Given how dramatically these costs have risen in the past year, its logical to see a change in consumer behavior, especially around household expenses that are often perceived as indulgences, like dining out, said Kaminski. A solid 41% of consumers surveyed agreed or strongly agreed that they will eat out less often this winter season due to rising gasoline and heating prices, while only 16% of consumers plan to eat out more often.

The effect of gasoline and energy costs on restaurant dining did not vary significantly by geographic region. In the Northeast 38% of consumers reported that they plan to dine out less often because of higher energy and/or gasoline expenses, whereas the South had the highest proportion of those who would be deterred (45%). [Chart A]

The good news is that many of the most valuable customers the frequent diners will not change their habits, notes Kaminski. This critical frequent diner segment (those who report that they dine out often or regularly) appears to be less concerned with rising gasoline and energy costs, with only 27% stating that theyll eat out less as a result. On the other hand, a full 56% of infrequent diners (those who report that they dine out seldom or occasionally) claim that theyll dine out less often this season due to these rising costs.

Not surprisingly, income plays a major part in how rising energy costs will effect restaurant attendance, said Kaminski. The majority (52%) of low income consumers (adults with a household income under $45,000/year) agreed that they would eat out less often this season due to rising fuel prices, as compared to mid and high income consumers (36% and 27%). [Chart B] Its also interesting to see that 24% almost a quarter -- of high income consumers agreed that they plan to eat out more this winter, as compared to mid and low income consumers, which came in at 13% and 15% respectively.

Chart A: Rising gasoline and home heating costs mean that I eat out less often this holiday season.* Agreeing Americans Disagreeing Americans Northeast 38% 37% Midwest 43% 27% South 45% 30% West 40% 34% * Q: Please tell us how much you agree or disagree with the following statements: Rising gasoline and home heating costs mean that I eat out less often this holiday season.

Chart B: Rising gasoline and home heating costs mean that I eat out less often this holiday season.* Agreeing Americans Disagreeing Americans High Income 27% 52% Mid Income 36% 32% Low Income 52% 22% * Q: Please tell us how much you agree or disagree with the following statements: Rising gasoline and home heating costs mean that I eat out less often this holiday season.

Are consumers giving restaurant gift cards? Do they make great presents?
Almost three-fifths (59%) of consumers agreed or strongly agreed that restaurant gift cards make great presents. Interestingly, however, only 22% planned to give them as gifts this season, added Kaminski.

There was no difference across income levels in either attitudes regarding the appropriateness of gift cards as presents, or in consumers intentions to give them as presents. Rather, restaurant dining frequency is the driving force behind whether or not a consumer is likely to purchase a gift card. Frequent diners were more likely than occasional diners to give gift cards this past holiday season (28% vs. 14%).

Consumers in the West were slightly less likely to agree that restaurant gift cards make great holiday presents (52% as compared to around 60% in other regions). They were also less likely to give holiday gift cards this past holiday season as compared to consumers from other regions (15% vs. approximately 25%, respectively).

The results of the InsightExpress study have a margin of error of +/- 3%. They were revealed at the Eighth Annual ICR XChange in Naples, FL hosted by Integrated Corporate Relations, an investor relations and corporate communications firm that provides unmatched counsel from senior-level professionals. For more information please call InsightExpress at 203-406-3233.

About InsightExpress
InsightExpress is an acknowledged pioneer of rapid turnaround, high-quality, online marketing research services. With its patented technology, market research expertise, and access to more than 100 million online individuals, InsightExpress enables its clients to easily harness market research to make the right business decision in real-time. The company is headquartered in Stamford, CT, and maintains offices in New York, Los Angeles and San Francisco. InsightExpress is affiliated with General Atlantic LLC. Visit us on the Web at www.insightexpress.com or call 203-406-3233.