10 QSR stories in 2013 that had nothing to do with food

Experimentation with spicy flavor profiles and new bread options were big this year, but so were value menus, mobile platforms and employee strikes.

Here is a look at 10 of the top (non-menu) QSR trends from 2013:

1. Value menus

Although the Recession recovery was in full swing this year, with falling unemployment rates and a historically bullish stock market, consumers remained value-conscious. According to The NPD Group, value menu visits were up 6 percent in the year ending August 2013, compared to the same period last year. A report from Rabobank cited macroeconomic pressures as one of the main drivers of the trend, with constraints on disposable income and falling consumer confidence. David Novak, CEO of Yum! Brands, said offering value is now a necessity because of today's economy.

Brands that have focused on the value menu this year include Taco Bell, which has been testing a new $1 Cravings Menu featuring 12 items. Dairy Queen added a $5 Buck Lunch value meal in the spring, while Church's Chicken put some marketing muscle behind its value offerings, Krystal launched a breakfast value meal and Subway introduced a $4 meal deal. Wendy's also its Right Price, Right Size menu in the beginning of the year, and McDonald's began shifting its Dollar Menu to the Dollar Menu and More.

2. Mobile payments/marketing

Driven by the vast and influential millennial generation, in 2013 (and predicted for 2014) the smartphone reigned supreme. Customers are demanding — and starting to expect — the ability to pay, order, collect rewards, receive coupons, be entertained and share their experiences from their mobile device, and QSRs are responding. This year alone, Subway, Tim Hortons, Dunkin', BK Delivers, Taco John's, Dairy Queen, Checkers/Rally's and Sonic tested or deployed a mobile payments option.

Other mobile efforts to emerge this year include McDonald's McD App test with offers and coupons. Marble Slab Creamery's loyalty points program, by Mercury Loyalty, increased transactions by 50 percent. Rita's Italian Ice partnered with Punchh to reward guests who refer friends.

Quiznos's location-based campaign, with Sense Networks, led to a 20 percent jump in redemption. White Castle's Text2Crave app pushes promos to fans when they're near a restaurant. Tim Hortons' TimmyMe app allows users to place a group order. Jersey Mike's app, with Splick-it, allows customers to order and pay, and manage loyalty rewards.

Wendy's app allows customers to personalize meals based on calories. Blimpie's Blimpie Run app features a game with the brand's mascot, Del E. Fresh, and the chance to earn reward. A&W's app features its mascot Rooty burping the alphabet every time a user fills up his virtual root beer.

Next year looks to be even busier, led by Taco Bell's plans to roll out its mobile ordering platform.

3. Employee strikes

The labor strikes among QSR employees have continued to spread across the country, with calls for a higher minimum wage — from the current $7.25 to $15 an hour — growing louder.

The current strike movement, largely facilitated by an organization called Fast Food Forward, began late last year and has since snowballed from New York City to more than 130 cities earlier this month.

As the movement continues to spread, it also appears to be gaining more support, although not quite to the level of $15/hour. President Obama has voiced his support for a higher minimum wage of $10.10. Also, 53 Congressional Democrats signed and sent a letter to companies such as McDonald's, Burger King, Wendy's, Domino's and Yum! Brands, asking them to increase wages for their store-level employees.

4. International development

Numerous international markets — both established and emerging — have been a boon for QSR brands, as global expansion picked up in 2013. For example, Krispy Kreme debuted in Northern India, Taiwan and South America. McDonald's, Auntie Anne's, Dunkin' Donuts and Popeyes planted flags in Vietnam. Dunkin' also entered Turkey and the UK.

Church's Chicken planned a Ukrainian footprint, while Wendy's eyed Ecuador. Marble Slab now exists in Pakistan, and Burger King returned to France and signed a joint venture to enter India. Quiznos is looking to expand in Indonesia, while Dairy Queen debuted in Costa Rica. Rita's Italian Ice opened in China, which was the brand's first ever international store.

Cold Stone entered South Africa and Pakistan. Cinnabon opened in the Eurasian country of Georgia, while Carl's Jr. added Denmark to its portfolio.

It wasn't all positive news overseas, however. Yum! Brands' flagship KFC China business continues to recover from the early-year supply chain and avian influenza issues that affected consumer confidence.

5. Competition

Competition for eating-out market share has never been more intense, and QSRs are feeling the pinch from the fast casual segment to c-stores to retail. The fast casual segment experienced a 9 percent growth in visits in 2013, driving some QSRs to step up their game — such as Taco Bell with its Cantina Bell line, KFC's KFC eleven spinoff and McDonald's build-your-own burger concept test.

A recent report from research firm Technomic said, "convenience stores have shifted their focus to provide a wider variety of fresh, high-quality food offerings to help gain a greater share and compete with restaurants." Retail is also taking away share; The NPD Group reports visits to retail stores for prepared foods at lunch have increased by double-digits since 2008. Meanwhile, casual chains are adding express models and more grocery concepts are adding delivery.

6. Expanded accessibility

One way some QSRs have responded to the market share battle is by increasing their accessibility. McDonald's, for example, is testing a "McDonald's after Midnight" menu for restaurants open 24 hours. Jack in the Box and Wendy's also heavily promoted late-night dayparts this year. Others took advantage of the fledgling but growing post-lunch daypart, such as Taco Bell's Happy Hour menu, and Sonic's snacking pipeline.

Some brands are also expanding their services to catering (e.g. Hot Dog on a Stick) and delivery (Burger King) to increase accessibility and revenue.

7. Digital menu boards

As the menu labeling laws loom, more restaurants are deploying digital menu boards to ease the burden of manually changing menu information. Plus? Digital signage is pretty.

"Digital signage generates more revenue by increasing visit frequency, mostly because of the compelling imagery of food and beverages," said Lyle Bunn, principal and strategy architect at Bunn Co.

Digital signage and digital menu boards are a focal point at many major QSRs as they continue to update their systems, including Wendy's, Burger King and McDonald's.

Dunkin' Donuts continues to accelerate its digital menu board installation as more restaurants undergo reimaging. Dunkin' Brands is also beginning to add digital menu boards throughout its Baskin-Robbins' system. Internationally, they are the standard for the brand.

A Taco John's restaurant on South Greeley Highway in Cheyenne, Wyo., is testing Panasonic's outdoor digital menu board in a drive-thru lane. American Dairy Queen Corp. this year named Dayton, Ohio-based digital signage solution provider STRATACACHE as an approved feature panel/digital menu board software provider, with plans to power digital feature panels across 300 Dairy Queen and DQ Grill & Chill locations.

8. Retail

More brands threw their hat into the retail ring this year, aiming for a royalty flush. Cold Stone Creamery unveiled a chocolate bar lineup, with 12 bars available for sale on its website. Whataburger brought its signature condiments into the retail space, as well as its pancake mix, while Arby's Sauce and Horsey Sauce are available by the bottle at restaurants nationwide.

Krispy Kreme made its coffee available at select Sam's Club locations throughout the Southeast. McDonald's coffee can be bought at select retail locations in Canada, and a retail line is also being tested in the U.S. The Dunkin' Bakery coffee series hit the retail market in October.

In May, Baskin-Robbins launched a new line of shelf-stable, sherbet-flavored freezer bars to about 15,000 major national retailers throughout the country, with a goal of reaching 50,000 outlets.

9. Refranchising

More brands unloaded company-owned stores to their franchisees in 2013, including Wendy's; Meritage Hospitality Group and NPC International both added multiple Wendy's restaurants to their portfolios this year. Krispy Kreme, Jack in the Box, Burger King and Arby's were also focused on refranchising efforts this year.

"We realized we had a limited amount of people and time in our day; let's focus on the couple of things we can be good at, let's focus on being a really good franchisor," Burger King's CFO Josh Kobza said recently. "Let's leave running the restaurants to people who are really good at it. This has allowed us to be much more focused."

10. Cause marketing

Finally, 2013 was certainly not without its share of tragedies and, as it does so well, the restaurant industry responded every time.

Restaurant employees raised and donated money, food, clothes, blankets, labor and anything else they could think of to help victims of the Boston Marathon bombings, Colorado floods and wildfires, Oklahoma tornadoes, Typhoon Haiyan in the Philippines and more. In addition to violent or natural disasters, restaurants stepped up to take care of wounded military members, hungry children, homeless families, animal shelters and anyone else who needed it.

Read more about trends and statistics.

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User Comments – Give us your opinion!
  • Peter Croppo
    10577311
    What - nobody implemented any energy reduction programs or equipment across the whole country, the whole QSR sector??? Amazing - reducing energy costs & significantly improving bottom lines for major QSR Brands and nobody seems to care. The more things change, the more they stay the same.... Cheers...
  • Alicia Kelso
    10576260
    Thanks for the comment, Peter. Although not in our top 10, yes, energy efficiency certainly remained a big story in QSR this year. In May, for example, we covered how operators are finally realizing ROIs from energy-efficient equipment adoption. (see here: http://www.qsrweb.com/article/213753/NRA-Show-13-Energy-efficient-equipment-proves-its-ROI) One of my favorite themes from 2013 was how energy-efficient equipment is now standard; the rule as opposed to an exception. We predict it will remain a strong topic in 2014 as well, and are looking forward to continued coverage. Thanks for reading, and cheers to you! Alicia Kelso Senior Editor QSRweb.com
  • Richard Adams
    10574396
    Refranchising is more a sign of profit pressures at the unit level. If you like your company owned store you can keep your company owned store - until it starts losing money. Then you "refranchise" it.
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