Restaurants To Benefit From Gift Card Popularity

Untapped demand for restaurant gift cards will result from an imbalance between givers and recipients this holiday season, according to the National Restaurant Association.

About one in five people, or 26 percent, plan to give a restaurant gift card this year, according to an Association survey of more than a thousand American adults about their holiday dining and restaurant gift card plans conducted from Dec. 8–11. However, nearly twice as many people, or 59 percent, said they would like to receive a restaurant gift card, suggesting a potential gift card deficit nationwide.

"Restaurant gift cards are high on the list of gifts consumers wish to receive this holiday season," said Hudson Riehle, senior vice president of the NRA's research and knowledge group.

Additionally, recent National Retail Federation research that found that more than a third of all surveyed gift card shoppers, or 33.8 percent, plan to give restaurant gift cards, ranking them second in popularity behind department store cards, which will be given by 38.7 percent of those shoppers.

Eight in 10 shoppers anticipate buying gift cards of all types this holiday season and said they expected to spend an average of $155.43 on gift cards, the highest amount since 2007 and increase of 6.7 percent from $145.61 last year, according to the Federation's 2011 Holiday Consumer Intentions and Actions survey. This holiday season, total spending on gift cards will reach $27.8 billion, according to the retail trade group's research.

Much of the increase in gift card sales stems from the growing number of purchasing and delivery options, according to the Federation's research and some card vendors. Restaurant gift cards are available at major retail locations and e-gift cards can be purchased online and delivered instantly via e-mail or text message.

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Some merchants offer electronic gift cards through social media outlets like Facebook, or the option to customize gift cards, adding to their appeal.

"eGift Cards are personal, immediate and make for a great alternative to the traditional gift," said Edithann Ramey, senior director of marketing for Chili's Grill & Bar, in a statement. "Chili's guests can experience all-around value this holiday with eGift Cards as they make an easy yet memorable last-minute gift sent via email, posted via Facebook or printed at home; and all for 10 percent off purchases of $100 or more."

In response to the growing popularity of gift cards, restaurant chains and companies are expanding their card offerings  and enticing buyers with gifts just for purchasing the cards, as well as featuring gift cards in advertising, including TV spots.

"A gift card to a restaurant makes for a flexible gift that allows recipients to use it next time they visit their favorite restaurant or save it for a special occasion, such as a birthday or anniversary," Riehle said. "It's the perfect choice for those who wish to provide friends and family with an experience rather than a material item."

Among other findings from the NRA's survey:

• 65 percent of women, versus 52 percent of men, are somewhat more likely to want to receive a restaurant gift card this holiday season, but Americans across all age groups are equally likely to appreciate receiving a restaurant gift card.

• Of those consumers who would like to receive a restaurant gift card this holiday season, 58 percent said they would prefer that the card be to their favorite restaurant, 29 percent said they would like cards for restaurants they haven't been to before and 11 percent desired gift cards for a restaurant that they likely wouldn't visit if they didn't have a gift card.

• Related to gift card usage, 44 percent of the surveyed consumers who wish to receive a restaurant gift card as a holiday gift said they would use it within a few weeks, 43 percent said they would save it for a special occasion and 12 percent said they would use it as soon as possible.

Contact Alan J. Liddle at alan.liddle@penton.com.
Follow him on Twitter: @AJ_NRN