Gas
prices at the pump continue to rise just as consumer’s paychecks carry home a
little more cash from the tax rebate.
Unfortunately once again the line between foodservice sectors continues
to get thinner and thinner as consumers have become ‘meal price transactional’ according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice
Solutions®.
Back
in 2002 in an early effort to combat customer migration from the restaurant
sector to grocery stores and C-stores McDonald’s introduced its
popular Dollar Menu and gave the restaurant sector a success platform to regain
customer traffic and drive top line sales and bottom line profits. The simple
fact is the food Price, Value, Service Equilibrium continues to evolve and reset.
Grocery
store deli operations continue finding incremental day-part meal sales success
as do convenience stores according to recent Grocerant ScoreCards. The success
within both of those sectors has put pressure on the restaurant sector
according to Johnson.
Food
industry research icon Bonnie Riggs of the NPD Group
stated “Value menu traffic was up 10 percent for the first three months of
2018, while value menu sales chalked up a 13 percent gain”. ..The results
lifted value menu traffic 1 percent for the fiscal year ended March 2018,
reversing three consecutive years of declines, according to NPD.”
“It’s
clear that major restaurant chain operators are pulling out all of the stops to
get consumers to visit this year,” said Riggs, author of a new report titled
“Value Wars 2.0: The Value Menu Strikes Back.”
Taco Bell, known for its
low-priced food and “Dollar Cravings” value menu, appears to have an edge in
the latest price war. It sold a record 53 million orders of its new $1 Nacho
Fries in five weeks during the first quarter, contributing to outsized value
menu sales gains, NPD said.
There
is a battle for share of stomach underway within the foodservice sector
according to Johnson and new non-traditional companies the ilk of IKEA,
CostCo
continue to garner customers with fresh prepared meals, meal components that
are Ready-2-Eat and Heat-N-Eat offering with price points that are disruptive
for most restaurant operators.
Are your customers becoming ‘meal price transactional’? Do you know how to
elevate your branded menu without capitulating on Price? Does your current business model look more
like yesterday than tomorrow? The team at www.FoodserviceSolutions.us can help. Contact: Steve@FoodserviceSolutions.us
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