Report: Menu deals no longer driving restaurant visits

Nov. 6, 2012

According to new research from The NPD Group, consumer-perceived deals – such as combined item specials and dollar/value menus – that enticed consumers to visit restaurants during the height of the recession no longer serve as an impetus for driving traffic growth.

NPD's foodservice market research finds that for the year ending August 2012, non-deal restaurant visits increased by 1 percent in each of the last two years while visits on-a-deal have been on the decline during the same timeframe. This is a reversal from three years ago when consumer perceived deals were up 3 percent for three years in a row and non-deal visits were trending down.

Driving the fall off in deal-related traffic is a decline in combined item specials and dollar/value menus, each of which represents about 20 percent of deal traffic, according to NPD's CREST, which continually tracks the foodservice industry based on consumer reporting of more than 400,000 visits to foodservice outlets a year.

While the total number of combo meals ordered is up, the percent of consumers indicating that they ordered a combo meal "on deal" is down, which may be an indication that consumers no longer perceive combo meals to be a deal, or combo meals have become everyday price and the way to order a full meal. The decline in dollar/value deal-related traffic is likely tied to a move away from 99-cent items and the type of food items being offered on these menus. Like combo meals, many consumers perceive them to be the way to order individual items, smaller meals or the way to "build your own combo." However, coupons, discounted price and senior citizen deals are up.

"In 2008 when economic concerns caused many consumers to stop some of their discretionary restaurant visits, many restaurant operators turned to offering consumers more deals to drive traffic," said Bonnie Riggs, restaurant industry analyst. "As has been historically the case, when deals are in the marketplace for an extended period of time, consumers tend to expect them or see them as everyday price and not as a deal. What should restaurant operators do? Examine their value proposition, not just in terms of prices but in quality and service; leverage the convenience factor of restaurants; and offer variety, all three of which consumers have consistently told us are important to them."

As the tide shifts from recession-era habits, many chains are taking a more active approach in promoting their everyday value offerings alongside premium items. McDonald's, for example, noted in its Q3 earnings call that it is investing in driving traffic by emphasizing value across most markets to drive incremental traffic. However, the company is balancing value messaging with premium menu news, including its recent introduction of the Cheddar Bacon Onion sandwich.

Within two weeks, Sonic hosted a 50-cent corndog promotion and then rolled out two new premium chicken sandwiches, including the Asiago Caesar Chicken Sandwich.

Read more about trends and statistics.

Topics: Business Strategy and Profitability , Marketing / Branding / Promotion , Operations Management , Trends / Statistics

Sponsored Links:

Related Content

Latest Content

comments powered by Disqus