in4mation insights’ Post

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

📈As menu prices increase, many restaurant customers seem to have hit their pricing limit, especially in California. RMS insights reveal California's April average prices jumped 5.7% YOY, compared to the 2.6% YOY national average. Discover more about the QSR industry's current landscape in Alicia Kelso's Nation's Restaurant News article: https://lnkd.in/e6ZTNfZs For more insights into the fast-food landscape, visit our latest QSR trends report: https://lnkd.in/egn8_q2r #restauranttrends #california #minimumwage

“As many restaurant companies prepare to report their second-quarter results, investors are expecting to hear that diners are visiting their locations less frequently and that sales have turned sluggish, with few exceptions such as Chipotle. In the hopes of lifting their results for next quarter, chains such as McDonald’s, Taco Bell, Burger King and Wendy’s have unveiled or revived meal deals with a $5 price tag.” “Fast food typically fares better than the broader industry during economic downturns. But the last several years of price hikes have led many consumers to conclude that fast food just is not a good deal anymore. More than 60% of respondents to a recent LendingTree survey said they have cut back their fast-food spending because it is too expensive.” “Runaway menu prices have scared off many fast-food customers, including those in the low-income bracket who make up a sizable chunk of the sector’s customer base. Sensing diners’ fast-food backlash, players such as Brinker International’s Chili’s have used their marketing to highlight their own value relative to the cost of a fast-food meal. Casual-dining chains have taken some market share from the fast-food sector, Darden Restaurants CEO Rick Cardenas said in June.” “Generally, fast-food chains tend to focus their discounts and value meals on the first quarter, when consumers are trying to save their dollars after the holiday season and stick to New Year’s resolutions. As temperatures rise, so do restaurant sales, and operators usually do not need to rely on deals to bring in customers.” “But this summer is different. Fast-food chains need discounts to fuel traffic — and sales growth.” “Without convincing customers to add a milkshake or another entrée to their order, the discounts ding profits and become unsustainable in the long run. That is a big worry for investors who are already skeptical that chains will not see the traffic bump they are hoping for.” “Investors are not the only ones skeptical about the promotions — so are franchisees, who often push back against discounts because they hurt their profits.” “Coke CEO James Quincey said on Tuesday’s earnings call that the beverage giant has seen weaker away-from-home sales in the U.S. as quick-service restaurants struggle. To boost demand, Coke is partnering with food-service customers to market food and drink combo meals, according to Quincey.” “The promotion is bringing customers back to its restaurants, according to both executives and foot traffic data. June 25, the launch day of McDonald’s $5 meal, drew 8% more visits than the average Tuesday in 2024 so far, according to a report from Placer.ai. The pattern repeated in the following days as the chain exceeded year-to-date daily visit averages. Placer.ai also found that discounts helped drive traffic to Buffalo Wild Wings, Starbucks and Chili’s.” - Amelia Lucas

William Blair’s recent survey pointed out something we're probably all feeling—people are getting tired of the rising costs of eating out. Higher menu prices, fees, and tips are pushing more guests to the drive-thru to avoid extra costs. And when it comes to digital ordering, we’re seeing more folks, especially under 60, getting comfortable with QR codes and kiosks, though many still prefer physical menus. One last thing worth mentioning: brand loyalty programs are gaining traction. 55% of people now say they’re using them, and for 41%, these programs actually influence where they eat. Loyalty seems to be making a real impact on dining decisions. Anyone else seeing these trends play out in your own restaurant habits?

"Restaurant Winners Have a Common Trait: Keeping a Lid on Prices." This headline makes perfect sense: all things being equal, consumers will prefer lower prices, particularly in tough economic environments. It's also easier said than done. Wingstop Restaurants Inc., Texas Roadhouse, Chipotle Mexican Grill and Domino's are four companies that, according to The Wall Street Journal, have each earned "double-digit, year-to-date share price gains relative to a 7% jump in the S&P 500." And all four companies indicated that continuing to deliver value to consumers has been instrumental in outperforming their competitors. But how can restaurants maintain affordable prices as food prices and labour costs continue to rise? Here are three ideas to consider: ➡ Explore Self-Service Options For quick-service restaurants, enabling consumers to order their meals using self-serve kiosks and mobile apps can reduce labour costs and better meet the needs of convenience-oriented customers who'd rather do it themselves. ➡ Ensure Staff Focus on Top Priorities Whether it's a server suggesting the day's specials or a QSR cashier asking if you want to upsize your fries, it's clear that well-trained staff can influence what customers buy... and how much more they spend. Technology platforms that keep staff up-to-date on new product offerings and communicate corporate priorities have a double benefit: they help reduce training time (and associated labour costs) AND help teams focus on selling more profitable items. ➡ Embrace Localization For restaurants where customers order at a counter (as opposed to being served by a team member at a table), digital menu boards make it easier to feature offers that make the most sense for individual locations. For instance, a restaurant on a college campus might benefit by featuring value meals, whereas a restaurant in a wealthier neighbourhood might do better showcasing the chain's newest (and most premium-priced) offerings. Digital menu boards allow restaurants to easily adjust what they feature during any given daypart, enhancing relevance and driving incremental sales. And it's easier for restaurants to maintain lower prices on core menu items when they're confident in their ability to make upsell items more enticing. = = = = = All three recommendations outlined above are examples of technology employed within restaurants to help operators run more efficiently, allowing them to offer acceptable prices to value-seeking consumers while still maintaining profitability. Better technology => better operations => more satisfied customers => better performance ... that's how restaurants can maintain affordable prices as food prices and labour costs continue to rise. #BrickAndMortar #Retail #QSR #Restaurants #Technology

Consumer spending at restaurants grew 5% in 2023 compared to 4% growth in 2022, according to data shared by Circana in a Monday press release.  Industry sales in 2023 exceeded 2019 sales by 12%, even though traffic is 8% below its pre-pandemic levels. Traffic grew 1% last year compared to 2022. Circana predicts that the restaurant industry will see 1% traffic growth this year. The top 50 restaurant chains have seen their sales grow relative to the overall industry, Circana found. Aggregate consumer spending rose 7% and reached $313 billion, compared to a 2% dollar growth seen at all other restaurants in 2023.

Some interesting insights to value in the eyes of the customer and its effect on restaurant spend of an average person. https://lnkd.in/eDWCbyZA

The lines between grocery, restaurant, and convenience aren't just blurred for us in the industry; customers don't care about the lines. Placer.ai's data shows an increasing consumer shift towards grocers, superstores, and c-stores, outpacing traditional restaurant traffic. There is a broader industry challenge: adapting to evolving consumer preferences and economic concerns, urging a strategic rethink in service and value.

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.