In
the United States as of November 2015 the total number of people receiving food
assistance via food stamps (SNAP) was at 45.450 Million. That number was up 85,541 over the prior
year. It is no wonder 79% of total US
restaurant
sales take place within the QSR sector.
Clearly economic upheaval continues to linger, creating
employment instability, and cultural uncertainty. The whipsaw stock market is creating
incremental uncertainty and disillusionment for those that are doing
well. Is it any wonder restaurants have to leverage a two tier price
structure to entice retail customers?
Until the economy fully recovers and employment
participation rate climes off the bottom of the chart that now reports only a
62.7% participation rate. Today retailers
will have to be mindful that the new “middle is much lower than any time in
history” according to our Grocerant Guru®.
Two tier pricing is required by global brands today as
they need to garner new customers at each end of the spectrum to sustain growth
and profitability. In the United States chain restaurants specifically
branded fast food restaurants are leveraging and expanding Two Tier Pricing
too first garner trial and secondly build brand loyalty. They offer entry
level branded products like McDonalds LTO Any 2 for $2.00 dollar menu that
allow existing customers trial and existing customers can trade up with other
‘app’ LTO’s other specials on branded menu items.
“Fast food is changing, and not just in the category's
dominant US market. Amidst fierce competition, fast food brands have been
forced to differentiate themselves with broader menus, better food and
higher-end outlet designs. In developed markets this has led to the popularity
of the fast casual segment, but in emerging markets (most of which show a
strong preference for full-service dining) it has helped fast food gain
traction as a modern, lower-cost alternative to more traditional foodservice
formats according to an article in EuroMonitor.
The monitor went on “The branding opportunities inherent
in the fast food business model have also allowed these chains to appeal to
developing market consumers' taste for exciting new dining experiences. South
Africa-based chicken fast food brand Nando's, for example, has relied on strong
branding, exciting flavours and a unique dining experience to set it apart from
other chicken fast food chains, a fact that helped it achieve 19% value growth.
Similarly, UK bakery products fast food brands EAT and Pret a Manger have both
found success with a positioning of convenient, high-quality food, a modern
atmosphere and quick service.”
Foodservice Solutions® team believes
that “Mix and match meal component bundling with a focus on both product and
price positioning is key to drive growth in a volatile marketplace. Focusing on
fresh, high-end ingredients, especially, has helped the brands compete with
more traditional fast food concepts, and this kind of above-and-beyond
competitive positioning will continue to be integral to the success of any new
fast food concept”
Our Grocerant Guru® found that “The
universal commonalities in Ready-2-Eat and Heat-N-Eat fresh prepared food are
fueling retail success around the globe.” Do you have a product
positioning and pricing strategy? What is your growth rate? It may
be time to think about Outside Eyes from the Grocerant Guru®.
Invite Foodservice
Solutions® to complete a Grocerant Scorecard or a Grocerant Program
Assessment. Since 1991 www.FoodserviceSolutions.us of Tacoma, WA
has been the global leader in the Grocerant niche visit Facebook.com/Steven
Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant Contact:
Steve@FoodserviceSolutions.us
No comments:
Post a Comment