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MARKET WATCH: The key factors driving restaurant trade in North America

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During the Great Recession, many major restaurant chains turned to deals and promotions to generate short-term sales and remain top of mind with consumers, and the strategy worked.

Now, the strategy isn’t working as well, according to research firm NPD.

As higher menu prices offset the value of discounts and promotions, consumers are taking less advantage of restaurant deals, it reports.

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Neither deal nor non-deal commercial foodservice visits increased in the quarter ending September 2022. Foodservice deal occasions were down 1%, and non-deal orders were down 2% in the quarter compared to a year ago. 

Higher food and operational costs for foodservice operators have limited their ability to offer steep discounts and deals.

In the 12 months ending June 2022, there was a one-dollar difference between an average restaurant customer check on a deal and a check not on a deal.

Additionally, many operators, especially independents and smaller quick service and full service chains offer few or no deals, according to NPD’s daily tracking of the foodservice industry. 

Some major quick service restaurant (QSR) chains have increased their deal offerings. However, the chains with the highest deal rates did not outperform other QSR brands in the quarter ending September 2022.

Traffic to the QSRs offering the most deals was down 1% in the quarter compared to a year ago, the same decline witnessed by the balance of QSR.

Although deals aren’t driving traffic overall, there were some successfully executed promotions. These programs synched to loyalty programs, like digital coupons, or were creative, attention-grabbing, and relevant to customers.

The top-performing chains — those with the best traffic performance in the quarter — had high customer satisfaction scores based on friendly service, quality food, the taste of food, and affordability. 

“Today, the foodservice industry has not yet broadly turned to deals to drive traffic. Operators who want to generate short-term lift via discount promotions should consider creative promotions that don’t damage the perception of the brand’s long-term value,” said David Portalatin, NPD food industry advisor and author of Eating Patterns in America.

“However, it’s essential to remember that the critical traffic drivers remain quality food, tasty food, friendly service, and affordability. These are the attributes of the most successful restaurant brands.”

Tags : researchrestaurants
Andrew Seymour

The author Andrew Seymour

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