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Lisa W. Miller, CSP Nation's Restaurant News gives her insights on this. "As we enter the summer season, the restaurant industry finds itself in the midst of a familiar battle: discount wars. In less than a week, McDonald’s is unleashing its month-long $5 meal deal promotion, the fast-food giant’s latest attempt to woo customers back and turn up the heat on this summer blockbuster. Will McDonald’s promo be enough to triumph and win back value-conscious guests? After what looked to be three months of progress, economic anxiety across America shot up 5 percentage points, from 31% in April to 36% in May. Meanwhile, the 20% of consumers who say they are “spending as usual” is the lowest level we’ve seen in over a year. This isn’t just a restaurant problem – consumers are pulling back across the board. From our May data among 1,000 consumers 18+ years old, here is the percentage who say they participated in each activity sometime in the past 6 months: • 67% dine-in at restaurants (-9 percentage points vs. Q1 average) • 40% go to the movies (-8 points) • 63% go shopping at a retailer (-8 points) • 17% fly on a plane (-7 points) • 42% get hair done (-6 points) It's no secret that restaurants are hurting. As price increases continue to frustrate consumers, the impact on restaurant visit frequency is increasingly being felt as time goes on. More than half of restaurant customers (52%) say that restaurant prices have gone up too much, while only one third (34%) feel that their most recent restaurant experience was “definitely worth it.” That math just doesn’t work. If you’re familiar with my data, you may have noticed that the 52% of restaurant customers who are frustrated with price is down significantly from Q4 last year. While this may seem like a good thing, when paired with the visitation data, it implies that those who are most frustrated have simply given up. Not good news at all. Delivery isn’t faring better than dine-in; 62% agree/strongly agree that “getting restaurant food delivered is so expensive, it’s just not worth it anymore” and 19% have even made a conscious decision to use delivery less often over just the past 3 months...Click-thru to read more" https://lnkd.in/emdkrdXV #QSR #Entrepreneur #Restaurants #Franchise #Franchising #FranchiseChat Chainformation Altir Industries, Inc. Selling Franchises Boot Camp Titus Center for Franchising at Palm Beach Atlantic University Franchise Pipeline Franchise Development Outsource Ned Lyerly Joe Caruso Michael (Mike) Webster PhD Anders Hall Jonathan Martin Michael Scherr Delaney Hetzer Dr. John P. Hayes, CFE

Many restaurant executives report that lower-income consumers are cutting back the most on dining out. Typically, quick-service brands benefit when the economy weakens as consumers move from higher-priced to lower-priced dining options. However, this time, even fast-food customers are choosing to eat more meals at home. Grocery stores are contributing to this trend by lowering prices. In April, retail food prices decreased by 0.2%, while fast-food prices increased by 0.4%. For example, Target announced price cuts on 5,000 items, and Walmart noted that their lower prices are attracting former restaurant customers to their grocery sections. Walmart CEO John Furner highlighted that families are finding it more economical to shop at Walmart than to dine out. In response, restaurant chains are emphasizing value in their marketing strategies. McDonald’s will introduce a $5 meal deal next month, Wendy’s has launched a $3 breakfast meal, and Jack in the Box plans to offer value deals this summer.

As the fast-food industry battles shrinking foot traffic and rising costs, major chains like McDonald’s and Wendy’s are leveraging strategic price bundles to attract value-conscious consumers. Yet, with McDonald’s reporting a decline in sales growth and Wendy’s exploring dynamic pricing, the sustainability of such promotions remains in question. Restaurants must balance enticing deals with profitability, considering new menu innovations and loyalty programs to sustain customer interest. As Modern Retail analysts suggest, the challenge lies in finding a pricing model that maintains customer appeal while managing operational costs in an increasingly competitive market.    Our Take 💭 Things move at a fast pace in casual dining and quick services restaurants. That is the point: readily available value-priced meals, often grab and go, chosen from menus are reliable and appealing, and experiences that breed loyalty and repeat visits. And it is far from easy!   Restaurant brands need to be nimble to reach, engage and compete for customers, bringing them back to the table through promotions, new menu items and even the announcement of new locations or regional expansion. In an increasingly competitive market, where and how you allocate media spend is an exercise that needs to be as responsive and effective as you are.   Measuring and optimizing marketing performance is essential to achieving equilibrium in the operations of your business. Finding the right partner to help you achieve it should be the easy part. To learn more about how we can support your media scenario planning, contact us today at info@in4ins.com.   Read the full article, “Fast-food chains like McDonald’s & Wendy’s are locked in a price war” on Modern Retail: https://lnkd.in/emvu6GFT

South Korea’s, Baemin ((주)우아한형제들 (Woowa Bros.) to Impose Fees for Takeout Orders Baemin, South Korea's leading food delivery app, has announced the introduction of "packaging fees" for takeout orders beginning July 1. This move marks a significant shift in the platform’s business model as it aims to monetize packaging services. Existing partners will be exempt from these fees until March 2025. However, new restaurants joining the platform after June 30 will be subject to the new fees immediately. The packaging fee rate for takeout orders is set at 6.8%, mirroring Baemin's existing delivery commission. For instance, a chicken restaurant processing a 20,000 won order will incur an additional 1,360 won in packaging fees. While competitors like Yogiyo already charge for takeout orders, and Coupang Eats has deferred fee implementation until March 2025, Baemin's decision has sparked industry-wide attention. This announcement follows criticism Baemin faced in April for its plans to monetize packaging services, a move perceived as deviating from mutual growth policies. Baemin’s representative noted that this change aligns with the company's long-term strategy to transition to a paid model for all services, stating, “Whether it’s packaging fees for takeout orders or delivery, using our app system is the same.” Restaurant owners have expressed concerns about the new fees. Many note that takeout orders are popular among regulars looking to avoid delivery charges. With the introduction of packaging fees, these cost savings will diminish, potentially leading to higher menu prices. One restaurant operator commented, “We used to offer discounts for takeout orders as a gesture of goodwill, but with increased fees, we’ll have no choice but to reflect it in our menu prices.” Baemin's move is seen as an effort to offset losses from its free delivery policy, which was implemented to compete with Coupang Eats. With over 60% market share, Baemin bears a significant cost burden from free deliveries, more so than its rivals. In addition to the packaging fees, Baemin recently launched a trial of “Baemin Club,” a subscription service intended to retain consumers. Currently free, this service is expected to transition to a paid model in the future. As Baemin navigates these changes, the industry watches closely, anticipating further impacts on restaurant operations and consumer behavior. Stay ahead with the latest in food delivery news from the weekly Boolanga Bites newsletter, brought to you by Boolanga Business. Sign up for our LinkedIn newsletter now to receive weekly updates directly to your inbox every Monday.

Brian Will was on MSNBC this morning talking about this topic and Nation's Restaurant News is reporting on Restaurant Menu prices as well. No matter what anyone wants to say, restaurant menu prices continue to outpace grocery prices and this will ultimately affect traffic. There is definitely a place at which the consumer backs off. We need a change in economic policy to affect real change in how supply chain is fueling higher costs. NRN's Alicia Kelso highlights the same thoughts in an article I'll link in the comments. There was a deceleration in restaurant menu price inflation in July, though prices continued to outpace grocery prices. However, over the past 12 months, restaurant prices have risen by 4.1%, compared to a 1.1% increase in grocery prices, with limited-service meals up 4.3% and full-service meals up 3.8%. The Bureau of Labor Statistics’ Consumer Price Index (CPI) report shows that the food-away-from-home index (restaurant prices) rose by 0.2% in July, down from 0.4% increases in May and June. Meanwhile, grocery prices increased by 0.1%. Despite the slowdown, restaurant prices have now outpaced grocery prices for 17 consecutive months, continuing a significant gap between the two. This gap is around 300 basis points in favor of grocery stores, compared to the historical average of 60 basis points. She reports that Mark Kalinowski, CEO of Kalinowski Equity Research, predicts the gap will shrink gradually but not enough to have a major impact on restaurant performance for the rest of the year. He notes that same-store sales growth for restaurants is expected to be the lowest since 2016, excluding the pandemic year of 2020.

Kristen Altus for Fox Business Network - "Former CKE Restaurants, Inc. CEO Andrew F. Puzder gives an industry look inside how fast-food companies are trying to keep up with inflation and criticizes Biden's tax policy. With franchise and restaurant owners confronting a delicate balancing act between higher menu prices and labor costs, one former industry leader is concerned more doors are preparing to close nationwide. "There will be a lot of restaurants underperforming. Middle-performing restaurants are going to go away. Very good-performing restaurants will become midland or low-performing restaurants," former CKE Restaurants CEO — parent of Carl’s Jr. and Hardee’s — Andy Puzder said Tuesday on "Varney & Co." "As more restaurants close, there'll be more customers for fewer restaurants," he continued. "But people just can't afford these prices. And there's only so much you can do to reduce prices." A recent analysis from Fox News Digital broke down the dramatically rising fast-food prices that began even before the COVID-19 pandemic, at the most popular restaurant chains across the country. The McDonald's Big Mac, for example, cost $3.99 in 2019. Now, that price has more than doubled to $8.29, according to Fast Food Menu Prices, an online tracker. Subway’s long-advertised $5 Footlong sandwiches are no more, as a BLT Footlong that cost $5.50 in 2019 now costs customers $8.49 in 2024, though prices may vary by location. Additionally, Chipotle Mexican Grill's beloved chicken burrito that cost $6.50 in 2019 now runs customers $10.70. "I was talking to a fast-food chain CEO about a week ago, and he was saying they're going to take all of their ordering at the drive-thru… [with] professional order takers in India or in the Philippines. It won't be anybody in the restaurant that takes your order," Puzder said. "They're doing anything they can to reduce costs so they don't have to raise prices. But there's so much pressure, particularly in California." The Golden State saw a $20 minimum wage mandate go into effect last month, impacting restaurants that have at least 60 locations nationwide, except those that make and sell their own bread. But restaurant owners have warned the increased pay will lead to job cuts and higher prices for consumers. Multiple California food chains, including Pizza Hut, Southern California Pizza, Round Table Pizza and Vitality Bowls, announced layoffs following the law's passage...Clickthru to read more." https://lnkd.in/ePstP5QD #QSR #Entrepreneur #Restaurants #Franchise #Franchising #FranchiseChat Chainformation Altir Industries, Inc. Franchise Pipeline Franchise Development Outsource Ned Lyerly Joe Caruso Michael (Mike) Webster PhD Anders Hall Jonathan Martin Michael Scherr Dr. John P. Hayes, CFE

According to the Bureau of Labor Statistics, restaurant prices have surged by 27.2% since June 2019, a spike that has led many to tighten their belts when it comes to eating out. In response, major players like McDonald's, Burger King, and Taco Bell are doubling down on value promotions, rolling out enticing $5 meal deals and other budget-friendly options. This focus underscores a broader shift in the fast food industry, where innovation is not just about new menu items or technology, but also about rethinking pricing strategies to keep pace with consumer needs. It's a reminder that in a rapidly changing market, those who adapt and meet customers where they are will continue to thrive. #FoodTrends #ValueMeals #RestaurantAdaptation #MenuInnovation

I don't think anyone who follows the restaurant industry will be surprised by the statistics in this article from Restaurant Business Online (https://lnkd.in/ehcs_TFA). In short, restaurants are losing traffic to retailers - particularly supermarkets and convenience stores - which have upped their game when it comes to prepared foods. And while the focus may be on prepared foods, the reality is frozen and refrigerated prepared foods have also improved giving prepared foods overall a run for their money. The longer this situation plays out, the more fundamentally consumer behavior will change for the long-term. Their expectations from restaurants will shift, their perception of value will change, and the role restaurants play in their lives will be altered. There's no easy answer here as restaurants continue to struggle with rising costs and labor shortages. Fine dining restaurants are benefiting as they offer strong value propositions based on consistently excellent hospitality, food and beverages, but this segment can't power the foodservice industry. Ultimately, we need bold innovation not only in menu offerings but operational formats to meet consumers where they are now and where they'll be in the future. #menumatters #foodservice #restaurants #foodandbeverageindustry #consumerinsights #consumerbehavior #cpg #hospitality #trends2024 #innovation #retail

𝐒𝐮𝐛𝐰𝐚𝐲® 𝐏𝐚𝐫𝐭𝐧𝐞𝐫𝐬 𝐰𝐢𝐭𝐡 𝐏𝐞𝐩𝐬𝐢𝐂𝐨 𝐢𝐧 𝐭𝐡𝐞 𝐔.𝐒. Subway®, one of the world’s largest restaurant brands, announced a 10-year partnership with PepsiCo to supply beverages in US outlets starting January 1, 2025. Read More: https://bityl.co/OrrY #Subway #PepsiCo #SubwayPartner #partnership #partnerwithus #news #NewsUpdate #BusinessNews #newsdaily #USNews

I love the phrase “drive it like you stole it” for many reasons. In the US Restaurant industry now is the time to do just that. 💰 2024 is on track for $1.1 trillion in sales according to the Wall Street Journal. Food service operators oversee a fast-paced, demanding environment and customers’ expectations set a high standard. In a recent survey, Nation’s Restaurant News reported that 53% of respondents recognized increased food costs as one of the industry’s biggest challenges. Restaurants constantly battle razor thin margins. 💲Rising payroll and ingredients costs along with waste, spoilage and theft are all areas that require attention and scrutiny. 💲 Paper, accompaniments, condiments and cooking mediums all need to be factored into pricing. 💲Even water costs can have an impact on profits. Are your suppliers delivering every item that you have paid for? Do the counts and weights match what was received? Could your restaurant benefit by looking at spending through a different lens? Does lowering food cost and increasing margin without raising menu pricing, reducing portion size or changing recipes sound interesting to you. Call me 610.686.8015.