Reflecting continued caution about the state of the U.S. economy, business at the nation’s restaurants from corporate diners declined three percent in 2012 from 2011, according to Vic Macchio, founder and CEO, Dinova, LLC.
This analysis is based on data aggregated from more than two million employees of companies in Dinova’s network, who spent $700 million on corporate dining at restaurants nationally in 2012. Total dining spending among Dinova’s broad cross-section of Fortune 500 corporate clients was down three percent on average, with declines consistent across the board.
Per transaction spending was $50.78 in 2012 versus $52.03 in 2011, down 2.5 percent. However, a disproportionate number of those transactions flowed through Dinova’s network of preferred restaurants, as corporations made efforts to direct their employees to preferred restaurants.
“This is a sign of the times and a continuing trend, rather than a blip, for the restaurant business,” Macchio said. “We see continued desire to save money on business dining among the corporations in our network. They do so through policy changes, reduction in travel, and restrictions on spending, based on the business situation. More recently, they have taken a procurement approach to this spending category, seeking to channel their dollars to a limited number of preferred vendors in exchange for better pricing.
“Dinova’s outsource model has fared very well in this environment, as corporate travel managers are eager to add the dining category to their existing managed categories of air, hotel, and car rental,” he said.
Macchio added that, despite a tightening of the reins, clients report that travel-related and in-town dining remain essential aspects of conducting business – sealing sales deals, providing client service, maintaining personal customer contact, and more. He said business travel and entertainment will continue to put money into the hands of restaurateurs across the country. It will simply be concentrated into fewer hands over time.
Dinova’s assessment of corporate spending is based on data collected from the full spectrum of business dining, from a breakfast of coffee and a croissant at a counter-service chain restaurant to a five-course dinner with an important client at a white-tablecloth prime rib and steak house, he said.
Dinova connects restaurants and corporations in a nationwide network, driving incremental, highly profitable business dining to restaurants and enabling corporations to reduce business travel expenses. Employees of companies in the corporate network patronize preferred restaurants that range from individual establishments to regional and national chains.
Dinova automatically tracks its clients’ transactions in its network restaurants and issues rebate payments to its corporations, based on their spending and compliance. Proprietary software enables Dinova to provide spending reports, allowing each Dinova restaurant partner to measure the program’s performance. Dinova transactions are transparent to the diner, server, and cashier. The transaction tracking takes place on the back end, with no loyalty cards or key entries required.
Benefit to Participating Restaurants
The 5,500 restaurants in Dinova’s network experience a 50 percent – 150 percent increase in patronage by Dinova business diners during their first year in the network. These restaurants encompass the full spectrum of fine dining, casual dining, fast casual, and quick-service restaurants.
Meals are concentrated in the Monday breakfast – Friday lunch periods, and the corporate transactions are 20 percent – 50 percent higher than restaurateurs experience on average.
Why Corporations Join the Network
The incremental business at the restaurants results from corporations’ instructing employees to utilize Dinova’s network restaurants when they are traveling or entertaining, wherever practical. Each corporation uses its own internal communication mechanisms to foster compliance. Dinova offers its clients a mobile app and a website to help travelers and locals find preferred restaurants. Corporations in the network receive rebates based on the amount spent in Dinova restaurants.
Dinova, LLC is headquartered at 11950 Jones Bridge Road, Johns Creek, GA 30005. (888) 346-6826. firstname.lastname@example.org.
Note to editors: Dinova’s program with restaurants is explained in a 2½ –minute video. One figure in the video requires updating. The video says that Dinova’s restaurant partners “gain exposure to hundreds of thousands of Dinova client employees.” As you can see from paragraph two of this release, that figure is now two million employees.