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Factors Affecting Consumers' Eating-OutChoices in India: Implications for the

Restaurant Industry

Jabir Ali a & Tribhuvan Nath aa

Centre for Food and Agribusiness Management, Indian Institute of

Management , Lucknow , India

Published online: 14 May 2013.

To cite this article: Jabir Ali & Tribhuvan Nath (2013) Factors Affecting Consumers' Eating-Out Choices

in India: Implications for the Restaurant Industry, Journal of Foodservice Business Research, 16:2,

197-209, DOI: 10.1080/15378020.2013.782243

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Journal of Foodservice Business Research, 16:197209, 2013Copyright Taylor & Francis Group, LLCISSN: 1537-8020 print/1537-8039 onlineDOI: 10.1080/15378020.2013.782243

Factors Affecting Consumers Eating-OutChoices in India: Implications for the

Restaurant Industry

JABIR ALI and TRIBHUVAN NATHCentre for Food and Agribusiness Management, Indian Institute of Management,

Lucknow, India

This study investigates the factors influencing consumers prefer-ences of eating out and restaurant foodservices through a primary

survey of 618 urban respondents, interviewed personally through astructured questionnaire, in six districts of Uttar Pradesh (India).The majority of the respondents reported eating out once in amonth. They primarily dined out with friends or family members onholidays or special occasions. The difference in consumers prefer-ences for eating out has been analyzed for family and fast food

style restaurants using Chi-square test. Logistic regression anal-

ysis indicates that the preference for eating out is significantlymore prominent among those who are younger (`. 15,000 per month).This article also discusses the implications of eating-out choices forthe promotion and development of restaurant industry.

KEYWORDS consumer choices, eating-out, foodservices,restaurant, tourism, India

INTRODUCTION

The food consumption behavior in India has significantly changed due toincreases in per capita disposable income, movement of households towards

This research was funded through the Uttar Pradesh Council of Agricultural Research,Government of Uttar Pradesh, Lucknow.

Address correspondence to Jabir Ali, Associate Professor, Centre for Food & AgribusinessManagement, Indian Institute of Management, Prabandh Nagar, Off Sitapur Road, Lucknow 226 013, Uttar Pradesh, India. E-mail: [email protected]

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198 J. Ali and T. Nath

higher income groups, changes in family structure, increase participation ofwomen in the work force, changes in lifestyle, increase in education andhealth awareness, increased access to information and communication tech-nologies, urbanization, increase in global interaction, and westernization

(Bhalla & Hazell, 1998; Bhalla, Hazell, & Kerr, 1999; Kaur & Singh, 2007;Kumar, 1998; Landes, Persaud, & Dyck, 2004; Pingali & Khwaja, 2004; Rao,Birthal, & Joshi, 2006). Indian consumers have traditionally spent the largestamount of household expenditures on food consumption, mainly food-at-home (FAH). However, over last few decades, the per capita expenditureson food-away-from-home (FAFH) as a share of per capita food consump-tion expenditures have risen slightly (National Sample Survey Organization[NSSO], 2007). According to the 61st round report of National Sample SurveyOrganization (NSSO), the number of meals eaten at home by urban dwellersin India has decreased by 1.66% in the last decade. In addition, within total

FAFH, food and facility have also changed over time (McCracken & Brandt,1987).

Traditionally, Indian consumers prefer to eat home-cooked mealsaconcept supported socially, culturally, and religiously, as well as individu-ally, where female members generally prepare food for the whole family(Goyal & Singh, 2007). However, due to structural change in food consump-tion pattern and emerging trend in eating habit, eating out has becomea part of the busy lifestyle and a fashion statement to celebrate specialoccasions and enjoy taste of cultural flavors (Ahedo et al., 2007; Goyal &Singh, 2007; Kivela, 2006). Eating out generally refers to food prepared,

purchased, and consumed outside the home. Several studies have exam-ined the factors influencing an individuals food choices between FAH andFAFH (Hiemstra & Kim, 1995; Jekanowski, Binkley, & Eales, 2001; Marsh,Fanning, & Stiegert, 2003). Sociodemographic trends are frequently citedas the potential causes of food intake away-from-home (Nayga & Capps,1993; Pratten, 2004; Stewart, Blisard, Jolliffe, & Bhuyan, 2005). Commonsociodemographic factors reported are age, education, income, employmentstatus, household size, and urbanization (Byrne, Capps, & Saha, 1996; Marshet al., 2003).

Historically, a restaurant is referred to as a foodservice place that pro-vided tables where one can sit and eat a meal in a relaxed mood, typicallyserved. However, international food chains have redefined the total foodofferings by focusing on ambience, marketing strategy, and menu accordingto the taste and preferences for regional and cultural food (Dash, 2005). Thecommercial foodservice establishments in India, based on menu, speed ofservice, and convenience including physical setup, can be classified into twobroad categories: fast food restaurants and family restaurants. Fast food asdefined by Merriam-Webster in 1951, means that one must eat fast and leavequickly (Yan, 2005). Family restaurants, on the other hand, are framed on

a stress-free, unhurried atmosphere with menus of items moderately priced

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Factors Affecting Eating-Out Choices 199

and targeted toward multiple age groups, including young children and theelderly.

The choice of food is influenced by a wide range of complex andoften interrelated factors, such as social, economic, cultural, political, and

environmental factors (Seoran, Ibnez, & Cifuentes, 2003). Since fastfood restaurants provide relatively less expensive food with rapid con-venient service, most of the away-from-home eating takes place in thefast food sector. Today, fast food has become a choice for breakfast,lunch, and dinner in several developing countries (Fu & Parks, 2001).Out of the 28 countries surveyed, India is among the top 10 countries interms of frequency of fast food consumption. Urban Indians are amongthe top 10 regular consumers of fast food across the globe (ACNielsen,2006). According to the online survey from ACNielsen, more than 70% ofurban Indians consume food from take-away restaurants once a month

or more often. Out of this, 37% consumers carry food from take-awayrestaurants at least once a week. Eating out is regarded as a pleasurableexperience to be enjoyed with good company (Gray, Bell, & Ponsonby,2003).

This article aims at analyzing the consumers eating out habitsand preferences on restaurant service attributes and factors affect-ing eating out through a primary survey of 618 urban respondents,

who were interviewed personally through a structured questionnaire.For leveraging consumer insight about eating out and understandinghow sociodemographic factors affecting eating out are important to

restaurant industry for developing strategies to attract potential con-sumers to tap the emerging market potential. In addition, a betterunderstanding of these factors can provide health and governmentauthorities with useful information on the structure of the food retailindustry.

DATA AND METHODOLOGY

Data and Survey Instrument

This study is based on a consumer survey carried out using a struc-tured questionnaire covering six districts, namely Agra, Allahabad, Lucknow,Gorakhpur, Jhansi, and Moradabad of Uttar Pradesh. A total of 618 respon-dents were interviewed personally to know their preferences on eating outand restaurant foodservices. The interview questionnaire was designed toobtain information about respondent demographics, preferences for eatingout and restaurant visits, preferences for Indian cuisine and fast food, pref-erences on foodservices offered at restaurants, and money spent per visit.Consumers preferences on various foodservice attributes were recorded on

a five-point scale (not important at all=

1 to extremely important=

5).

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Data Analysis

In this study, simple statistical analyses have been used, including descrip-tive analysis, cross-tabulation, Chi-square test, and the factor analysis.

An empirical model has been developed to estimate the relationship between

sociodemographic characteristics and consumer preferences for eating out.Consumers responses on eating out has been considered as a dependent

variable whereas sociodemographic factors, such as gender, age, educa-tion, marital status, social category, occupation, spouse occupation, familytype, family size, working members, number of kids in family, and incomelevel are considered independent variables. Logistic regression model isused to analyze the factors affecting eating out. The empirical model isdefined as:

Yi = +

n

i=1

iXi+ i (1)

where Yi is an unobserved response on eating out; Xi is matrix ofexplanatory variables comprising sociodemographic factors; is a vectorof unknown parameters; is the intercept; and i is the error term.

Based on the variable used in the present study, the empirical modelwas specified and estimated to predict the likelihood or probability of thefactors influencing eating out, as follows:

Logi= + 1GEN+ 2AGE+ 3EDU+ 4MAR+ 5SOC+ 6OCCP

+ 7SPOCCP+ 8FMTYP+ 9FMSZ+ 10WKMB+ 11KIDS

+ 12INC+ i

(2)

The description of variables used in the model is given in Table 1.Binary logistic regression analysis was adopted to assess whether

the sociodemographic characteristics influence consumers preferences for

eating-out and foodservice choices. The logit model is based on thecumulative logistic probability function and is specified as:

P= F(Z) =1

(1+ e(A+BX))(3)

where Z is a theoretical index determined by a set of explanatory variablesX; F(Z) is the cumulative logistic function; e represents the base of naturallogarithms; and P is the probability of success when explanatory variable

has the value X. Maximum likelihood estimation technique is used, which isthe most suitable for logit regression.

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TABLE 1 Factors Affecting Consumer Preferences for Eating out and Demand for Foodservices

Variables and description Code Wald Exp()

Gender (1 = if male, 0 = female) GEN 0.047 0.022 1.048

Age (1 = if above 30 years, 0 = otherwise) AGE 0.615a 3.447 0.541Education (1 = if graduate, 0 = otherwise) EDU 0.436b 4.259 1.547Marital status (1 = if married, 0 = otherwise) MAR 0.037 0.008 1.038Social category (1 = if Gen/OBC, 0 = otherwise) SOC 0.179 0.351 1.196Occupation (1 = if employed/student, 0 =

otherwise)OCCP 0.426a 2.987 1.532

Occupation spouse (1 = if employed/student, 0 =otherwise)

SPOCCP 0.544a 2.844 1.723

Family type (1 = if non-vegetarian, 0 = otherwise) FMTYP 0.268 1.648 1.307Family size (1 = if up to five members, 0 =

otherwise)FMSZ 0.223 0.987 1.250

No. of working members (1 = if two and more,0 = otherwise)

WKMB 0.479b 4.503 1.615

Kids in family (1 = if yes, 0 = otherwise) KIDS 0.202 0.751 1.224Income (1 = if higher than `.15,000pm, 0 =

otherwise)INC 0.743c 12.033 2.102

Constant 0.305 0.210 0.737Sample size 631Nagelkerke R2 0.119

Value of log-likelihood function 648.278Correct prediction (%) 74.8Chi-squared (df= 12) 52.208

aSignificant at the 0.01 level.bSignificant at the 0.05 level.c

Significant at the 0.10 level.

RESULTS AND DISCUSSION

Demographic Profile of Respondents

The sociodemographic profile of overall sample is shown in Table 2. Thesample comprised 69% male and 31% female respondents. The age com-position of the sample shows that majority of the respondents were young(55 years), the aver-age age of the respondents being 37 years. Educational profile of the

sample indicates that about 41% of respondents were graduates and helddiplomas/degrees or had additional post graduate qualifications; 37% had asecondary and higher secondary levels. Majority (51%) of the respondentshave 35 members in their family, with an average family size of 6 members.The average number of earners being one or two in most of the families,the average household income was estimated as `. 10,696 per month, with adominance of`. 5,000`. 10,000 income group.

Consumers Eating-Out Preferences

Survey results indicate that out of the 618 respondents interviewed, 461(75%) respondents ate-out monthly or more regularly. Percentage analysis

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TABLE 2 Sample Sociodemographic Characteristics

Demographic N % Demographic N %

Gender Marital StatusMale 426 68.9 Married 448 72.6

Female 192 31.1 Unmarried 169 27.4Age of respondents (years) Family size (no.)

5 293 47.54655 76 12.3 Average 6>55 68 11.0 Working members (no.)

Average Single 271 44.5Education Two 202 33.2

Illiterate/literate 57 9.3 35 129 21.2Below secondary 66 10.8 >5 7 1.1Secondary/higher

secondary227 37.0 Average 1 2

Graduate/Post Graduate 250 40.8 Children in familyProfessional

course/Diploma13 2.1 Yes 426 68.9

Occupation of respondents No 192 31.1Agriculture & allied

activities8 1.3 Monthly household

incomeService 158 25.7 `25000 35 5.7

Average monthlyincome (`) 10760.5

of responses of eating out respondents on various eating out choices alongwith restaurant type is given in Table 3. Most consumers prefer FAFH oncea month or two to three times a month, and preferably with family orfriends. Responses on preferences for food type revealed that more than80% respondents liked vegetarian food while eating out in both typesof restaurant. As eating out happens in groups with friends and familymembers, consumers mostly prefer arrangement of servers in restaurants.

Importantly, the number of members going for eating out together variesfrom trip-to-trip. Average expenditure per trip also varies according tonumber of persons and preferred restaurant type.

The results of Chi-square test on consumers eating out choices betweenfast food outlets and family restaurants indicates that there are significantdifferences in frequency of visit, preferred company, and occasions foreating-out. Visiting fast food restaurants is a frequent phenomenon ascompared to family restaurants (p < 0.01). However, consumers preferfamily restaurants while eating out with family members (p < 0.01) whereasfast food counters are preferred place for celebrating holidays and/or special

occasions such as birthday parties/ festivals.

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TABLE 3 Consumers Eating out Preferences

Familyrestaurant

Fast foodoutlet Total

Eating-Out preferences N % N % N % 2

Frequency of visit 10.892a

Once in a month 114 48.3 83 38.6 197 43.7Twicethrice in a month 89 37.7 76 35.3 165 36.6More than three times in a month 33 14.0 56 26.0 89 19.7Total 236 100.0 215 100.0 451 100.0

Preferred company 10.599a

Family members 152 64.4 107 49.3 259 57.2Friends/colleagues/guests 70 29.7 90 41.5 160 35.3

Alone 14 5.9 20 9.2 34 7.5Total 236 100.0 217 100.0 453 100.0

Preferred occasions 10.794a

Holiday/special occasions 108 45.8 75 34.7 183 40.5When family say 22 9.3 14 6.5 36 8.0When friends/colleagues/guests comes 41 17.4 61 28.2 102 22.6Others 65 27.5 66 30.6 131 29.0Total 236 100.0 216 100.0 452 100.0

Preferred food type 0.536Vegetarian 196 83.4 172 80.8 368 82.1Non-vegetarian 39 16.6 41 19.2 80 17.9Total 235 100.0 213 100.0 448 100.0

Preference for foodservices 0.072Waiter service 230 98.3 212 98.6 442 98.4

Self service 4 1.7 3 1.4 7 1.6Total 234 100.0 215 100.0 449 100.0

asignificant at the 0.01 level.N = number.

Consumer Preference of Restaurant Attributes

Consumer preferences of a restaurant are typically influenced by variousattributes and involve an interaction between the consumer, foodservices,and the restaurant (Fitzsimmons & Fitzsimmons, 2000). Lahue (2000) pointed

out that physical ambience of the restaurant was an important considera-tion while looking to eat out. Raab, Mayer, and Shoemaker (2009) arguedthat speed of foodservice and value for money were important factors inselecting a restaurant. Mill (1998) investigated that people generally dine infast food restaurants or in moderately priced table-service restaurants. A littleexpenditure and an accessible location are prime factors for selecting fastfood restaurants. Moderately priced restaurants (like coffee shops, cafeterias,family restaurants, and restaurants that specialize in Indian cuisine) are mostpopular among middle- to upper-income people.

Consumer satisfaction is the leading criterion for the survival of restau-

rant industry (Susskind, 2005; Vavra, 1997). Foodservices are important

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factors of restaurant industry having great implication on tourism develop-ment (Elmont, 1995). However, the contribution of food and foodservicesto tourism had been largely ignored (Handszuh, 1991). Foodservices havegenerally been sub-summed into that of generalized hospitality (Wearne &

Morrison, 1996).The factor analysis of 19 restaurant attributes using principal compo-nent extraction method with Varimax rotation has produced 7 factors thatexplained 70.6% of the variance (Table 4). The evaluation of consumersresponses (by mean scores) on each of the restaurant attribute is also pro-

vided with indicating the consumers importance to individual attribute.The grouping of attributes was based on its factor loading; an attribute isgrouped to the factor that has the highest factor loading score. The columnCommunality records the amount of variance an item share with all otheritems included in the analysis.

The first factors, termed Ambience & Services, covers the appear-ance of the restaurant in terms of layout design, seating capacity and

TABLE 4 Factor Analysis Results for Restaurant Attributes

Factors Meana Factor loading CommunalitiesVariance

explained (%)

Ambience & services 13.80Decoration & novelty 2.87 0.79 0.73Friendliness/attentiveness of staff 2.90 0.75 0.69Seating capacity & booking 2.67 0.60 0.71Reputation 3.48 0.46 0.46

Convenience 12.40Location 2.52 0.75 0.73Parking facility 2.64 0.69 0.52Conveyance 3.10 0.61 0.56

Accessibility 2.12 0.43 0.54

Food quality & safety 11.21Freshness of food 4.48 0.85 0.75Food safety 4.51 0.80 0.70Food quality 3.99 0.66 0.65

Timing & security 10.25

Market timing 3.68 0.87 0.84Security 3.37 0.84 0.83

Additional facility 8.31Acceptance of credit card 1.78 0.90 0.86Nearby availability of ATM 2.49 0.73 0.79

Food variety 7.57Food variety & dietary menus 3.79 0.81 0.77New recipes 3.75 0.69 0.73

Value for money 7.05Discounts/combo pack 3.36 0.84 0.79Price 4.43 0.61 0.77

a

Not important at all=

1, Extremely important=

5.

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booking facility, reputation/image, and staffs attitude while serving cus-tomers. Convenience is defined as the second factor associated with thelocation with sufficient reach of destination and places, vehicle parking facil-ity, and transportation for the convenience of customers. Food Quality &

Safety is the top rated factor that covers the most prominent quality offood served and food hygiene, including freshness of food. Timing &Security is the second most rated attributive factor related to restaurantoperating timings and security features or facilities offered by the restau-rant that is convenient to customers. The factor Additional Facility includedcustomers online payment facilities, such as credit card and nearby acces-sibility of automated teller machine (ATM). Food Variety factor deals withmenus of food varieties and new and innovative recipes. The last factorValue for Money factor refers to aspects related to monetary value for themajor services provided by the restaurant, and its ability to provide quality

food.

Factors Affecting Eating-Out and Restaurant Food Services

Younger people, specifically in the age group of 2045 years, who spendmost of the time away from home in colleges or work places (thoseemployed), are more inclined to eat out as compared to the older age group(> 45 years; Chang & Yen, 2010; Putnam & van Dress, 1984). Capps and Park(1997) and McCracken and Brandt (1987) note that both younger and olderpeople are assumed to have differences in tastes and preferences for food,

eating habit,s and lifestyles. Education plays an important role in knowl-edge and shaping peoples perception about diet and health. Therefore,individuals with different levels of education may have different knowl-edge and perception about diet and health, and consequently may perceiveeating-out in a different manner. A households demand for FAFH dependson its income as well as family size. An increase in a typical householdsper capita income may lead to an increase in spending at fast food restau-rants (Stewart, Blisard, Bhuyan, & Rodolfo, 2004). Eating out is a frequentphenomenon of smaller size households with typical single or two adultmembers. Further, with an increasing number of working women, there isless time to prepare lunches for workplace and even more stress in prepar-ing dinner at home. Therefore, the demand for FAFH has increased (Brown,1990; Redman, 1980).

Several empirical studies have attempted to analyze the potential influ-ence of sociodemographic factors on eating out and foodservice choices atrestaurants (Pratten, 2004; Stewart et al., 2005; Sun, 2008; Zopiatis & Pribic,2007). These findings illustrate that eating out is prominent in more edu-cated and higher income groups of employed people (Ahedo et al., 2007).In addition, the present analysis identifies the sociodemographic factors

which influence consumer preferences for eating out and the demand forfoodservice at restaurants.

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The logit analysis was performed using the SPSS Version 15.0 to analyzethe influence of socio-economic profile of consumers on eating out andfoodservices. The model is a reasonably good fit as indicated by the summarystatistics (Table 1). The value of log likelihood function is 648.278 for eating

out. The model correctly predicted 74.8% of the observed responses withrespect to eating out. The analysis yielded outputcoefficients and effect-coefficients Exp(). The estimated coefficients are measures of the changesin odds ratio. A positive coefficient sign indicates increased probability ofconsumers responses to adopt voluntary/mandatory food safety provisionand a negative sign to reject it. The degree of impact of the independent

variables is reported by so-called effect-coefficients Exp() that indicate thechange of the odds ratio when the independent value increases for oneunit. The Nagelkerke R2 has been used to assess the goodness of fit of themodel and the Wald test to estimate the significance of the influence of the

independents.The results indicate that preferences for eating out and foodservice

choices at restaurants are significantly more prominent in those individu-als who are younger (`. 15,000 permonth).

CONCLUSIONS AND IMPLICATIONS

Significant demographic, social, economic and lifestyle changes have ledstructural changes in food consumption pattern and have brought shift ineating habit towards eating out, in developing countries including India.The study provided an insight on consumers preferences for eating outusing primary data through consumer survey in India. Findings indicatedthat more than 75% of respondents reportedly ate away from their homes atleast once a month or more regularly. Majority of them preferred eating out

when celebrating a special occasion, with family and friends. A comparisonon preferences for eating out between family and fast food restaurants clearly

indicated that fast food is the more preferred choice for eating out in termsof frequency of visit. Significant differences in preference for eating out werefound in terms of frequency of visit, preferred company and preferred occa-sion between fast food restaurant and family restaurant. Visiting fast foodoutlets is a regular phenomenon. Family restaurants are preferred place overfast food outlets for celebrating holidays and special occasions. Vegetarianfoods are most liked cuisines at both formats of restaurants. Since eating outgenerally happens in groups with friends and family members, consumersmostly prefer arrangement of servers in restaurants.

The factor analysis identified seven most important factors whichattributed to preferences for eating out: restaurants Ambience & Services,

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Convenience, Food Quality & Safety, Timing & Security, AdditionalFacility, Food Variety, and Value for Money. Food quality, price, foodsafety, timing, accessibility, and reputation of restaurant were the mostpreferred attributes for restaurant choice while eating out. In the restau-

rant industry, the ability to deliver outstanding foodservices for pleasingthe consumers is the key for staying competitive in the emerging marketenvironment.

To understand the important sociodemographic factors that affecteating-out, a model was developed. The empirical findings from regressionanalysis indicate that consumers preferences for eating-out were significantlymore prominent in those individuals who were young, educated, employed,having more than one earners in the family, and belonging to higher incomegroups of households (>`. 15,000 per month).

The growing popularity of eating out has paved the way for the devel-

opment of the restaurant industry in the country. There are millions of peopleaway from their homes everyday either by necessity or by choice. This canprovide great business opportunities to the restaurant industry in India. Therestaurant and catering business has developed to feed this huge number oftransients-travelers and people out to have a good time. The study resultsprovide practical implications for the Indian restaurant and tourism industry.It provides strategic inputs to the restaurant industry for developing effectivestrategies as per consumers preferences for food and foodservices.

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