News
QSR discounting trend still hot but may be waning
April 18, 2010
Even as industry data trackers have shown signs that the economicrecovery is slowly beginningto takeoff, quick-service restaurants continue to court customers with deep discounts and freebies. But the industry also may be showing signs that competitive discounting may be easing.
A number of brands held giveaways in honor of Tax Day last week, but the deals are continuing throughout the month of April. Here is a roundup:
International Dairy Queen is kicking off the 25th birthday celebration for its iconic Blizzard mix-in frozen treat with Blizzard Customer Appreciation Week. Participating DQ Grill & Chill locations nationwide are featuring a BOGO offer now through April 25. Customers can purchase one Blizzard of any size and get the second of equal or lesser size for 25 cents.
　
Popeyes Louisiana Kitchen is bringing back its Pay Day special price offer. On April 21, Popeyes will offer eight pieces of its Bonafide Chicken for only $5.99 throughout the day at participating locations.Last April, Popeyes' Pay Day event saw lines wrapped around stores and down streets as customers flocked to the restaurants for the special deal. Many stores more than tripled their average daily volume, and some stores ran out of chicken.
Pretzelmaker/Pretzel Time is once again tying a promotion to National Pretzel Day, April 26. Customers must work, or rather sing, for their freebie, however. At participating stores, customers are asked to "sing for your snack." Guests can sign a snippet from a song of their choice — or simply say "National Pretzel Day" — to receive a free soft pretzel, with or without salt.Pretzelmaker also is hosting a contest to promote National Pretzel Day and its website redesign. Customers can upload a short video clip of themselves singing their own original songs towww.pretzelmaker.comfor a chance to win a $50 iTunes gift card weekly. The sweepstakes continues through May 16.
Carvel Ice Cream is promoting its new low fat ice cream and Flavor Shotz with a giveaway April 29. Throughout that day only, guests can enjoy a free cup of the new low fat ice cream and add one of the brand's newCarvel Flavor Shotzflavorings at no charge.
　
Baskin-Robbins will celebrate its fourth annual 31 Cent Scoop Night celebration April 28 from 5 p.m. to 10 p.m. at stores nationwide, during which, stores will reduce the price of its 2.5-ounce ice cream scoops to 31 cents.
　
Innovation beginning to win over value
One-day or limited-time deep discounts or giveaways are not limited to recessionary times, but value promotions and pricing certainly have resonated with consumers over the past year. The trend prompted Sonic, KFC and others to launch value meals for the first time, while Burger King ramped up efforts to steal market share by aggressively beefing up its dollar menu.
With Burger King soon switching from the $1 Double Cheeseburger — its longest and most aggressive value push in nearly 10 years — to the slightly less costly Buck Double, analysts see some of the discount pressure easing, Nasdaq reports.
From the story:
"It's a small baby step, but it's moving in the right direction toward less discounting," Deutsche Bank restaurant analyst Jason West said. "Hopefully, the rest of the industry will move in this direction as well."The $1 double cheeseburger deal was a hot topic among analysts and investors who scrutinized how it would impact traffic, sales and margins. Burger King's initial boost of nearly double-digit customer traffic growth eventually waned, though the company says it helped improve its value position in the eyes of customers.
Industry experts also are seeing signs that consumers may finally be distracted from their low-price-point fixation. KFC's chicken-breasts-as-buns Double Down sandwich drew online and media buzz as well as in-store traffic.Fortunemagazine sees the product's popularity not only as a good sign for Yum! but for the QSR industry.
　
From the story:
But while the Double Down may be a passing fad, it has longer-lasting implications for KFC, which has been struggling to grow sales for several years now. In fact, it's a turning point for the fast food industry as a whole — proof that customers will now flock to product innovation, not just pricing promotions.
Bonnie Riggs, restaurant industry analyst with the market research company The NPD Group, said in an earlier interview that product innovations are often a good way to draw consumer attention away from their focus on value after a recessionary period.
"This has been a long haul, and there's a lot of pent-up demand," she said. "Many consumers are probably tired of ordering the same thing because it's a lower price."
Related Media
Subscribe
Get the latest news and resources from QSR Web.
