Understanding Key Share Metrics: Share of Stomach, Share of Wallet, and Market Share
Everyone has to eat somewhere, and knowing how and where your customers choose to eat (a metric known as a share of stomach) is vital to reaching them with the right menu items, marketing messages, price points, and atmosphere. Consumer eating patterns are impacted by the economy, food trends, and other factors. In the highly competitive restaurant and grocery sector, it’s important to continually monitor the factors impacting the share of stomach, especially as the pandemic and recovery continue to unfold. Here’s the lowdown on this important metric and how to use it to drive revenue.
How Share of Stomach is Defined
Share of stomach gives you insight into where consumers are eating. Of all the money a consumer spends on food, where does the customer spend it? Do they buy groceries? Eat at fast food restaurants? Order meal kits? Each type of eating option – ranging from grocery stores to fast food restaurants, makes up a portion of consumer eating patterns. These portions, or shares of stomach, help you understand consumer food buying habits.
Understanding the share of the stomach allows you to spot emerging trends in consumer eating habits and track them over time. As you plan to open new locations and explore new menu items and offerings, it, along with other important restaurant metrics, helps you determine what types of eating experiences your customers are interested in.
How Share of Stomach is Measured
Share of stomach data is collected in a couple of different ways. Some data aggregators use polling to identify where consumers are eating. Others aggregate data from publicly available sources, such as the U.S. Census Bureau and the Bureau of Labor Statistics. This provides broad data on how consumers spend money in the grocery industry and at restaurants. But it’s usually not granular enough to be used for making business-level decisions.
At BBI, we collect share of stomach data by tracking consumer credit and debit card transactions. Transactions are segmented by type of establishment: traditional grocery, online grocery, meal kits, third-party delivery, limited-service restaurants, and full-service restaurants. This granular data set enables restaurants to make more informed business decisions.
The Difference between Share of Stomach, Share of Wallet, and Share of market
Several “share” metrics help restaurants understand where they stand competitively. These metrics help you see what consumers are spending on food specifically, how much consumers are spending on particular brands, and how much they’re spending at your restaurant compared to your competition. Here’s how to distinguish between the various “share” metrics.
What is the share of the wallet?
Share of wallet, like share of stomach, helps you understand where consumers are spending their money. However, while the share of the stomach is focused on broader food buying habits, the share of the wallet is focused on how much a consumer spends with a particular brand. For example, if a customer has a $200 monthly budget for food, and they spend $50 of that at a particular restaurant, then that restaurant occupies 25% of their share of the wallet.
How to calculate the share of the wallet
To calculate the share of the wallet, you need to know how many brands exist within a certain category and how those brands are ranked for customer preference. To determine customer preference, you’ll need to survey the ideal customer that you’re trying to profile. With that data, you can use the Wallet Allocation Rule developed by a team of leading business management researchers to calculate your share of your wallet.
What is market share?
Share of market, or market share, is the percentage of a market a particular brand owns, measured in revenue or number of customers. Like a share of the wallet, the share of the market shows you how you’re doing when compared to other brands. Market share can be segmented by metro area, region, or restaurant category.
How to calculate market share
To determine your restaurant’s market share, divide the company’s total revenue by the total revenue generated by the industry in the same period:
(Company revenue during a period/Total industry revenue during the same period)
What you can learn from Share of Stomach and other metrics
Understanding the share of the stomach, the share of the wallet, and the market share is vital for any restaurant’s competitive analysis. How and where consumers eat varies and their habits can change due to new trends in food, economic changes, and even cultural shifts. As consumers become more demanding, and the market grows more competitive, understanding where they’re spending their money is critical to meeting those demands and adapting as they change.
In addition to supporting restaurant competitor analyses, the share of the stomach can also help you plan future expansions. For example, if more consumers are spending money on limited-service restaurants, now may not be the time to launch a slew of new fine dining locations. It may be better to pare down those plans for now, and only launch in the most viable markets.
Share of stomach can also tell you how your customer demographics are changing, or if they differ from the larger sample in your market. This allows you to narrow your targets to the audiences who are buying your product, making your marketing efforts more effective.
Making share of stomach and consumer intelligence metrics actionable
Understanding the share of the stomach (as well as a share of wallet and market share) provides context for trends you may see in your revenue or guest sentiment. For instance, if you see your market share shrinking and your reviews are trending downward, then you can drill down into the cause of those bad reviews to recapture your lost piece of the market. Or, if your sales are down, it may be because consumer spending on food is down in general, which you can assess by analyzing the share of wallet, the share of the market, and competitive intelligence.
What is competitive intelligence?
Competitive intelligence tells you how your business performs in comparison to your competition. It enables you to create profiles of your competition so you can identify your differentiators and market them effectively.
A robust consumer intelligence tool will show you your competition’s share of the market, which can give you an idea of the competitive landscape and how much market share you can reasonably capture. It can also help you plan ways to be more competitive.
Consider BBI’s consumer intelligence product so you can get comprehensive, up-to-date data on broader consumer spending trends, demographics, and more, so you can make more informed strategic decisions for your business.
What do I get with my Black Box Consumer Intelligence subscription?
- Cloud-based technology that streamlines the process of working with massive data sets
- Track brand-specific competitor sales performance and demographics data
- Expand your insight into other verticals such as meal-kit services, third-party delivery, retail, and more, and assess how your business is impacted
- Over one million filter combinations and billions of data points, crunched in seconds, driven by transactions from 20 million debit and credit cards
- Data submission is not required, simply log in and start viewing the data
- Filter years of transaction history with daily level granularity for any date or date range