Restaurant, Grocery, and C-Store “Loyalty Program Pitfalls

 

Loyalty programs have long been touted by branded restaurant chains as essential tools for customer retention, but their true consumer appeal often misses the mark, according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  

In today’s fiercely competitive foodservice industry, the limitations of loyalty programs are increasingly glaring, pushing customers toward independent eateries or Ready-2-Eat and Heat-n-Eat options. Here’s a look at seven core complaints consumers have with restaurant loyalty programs and three effective strategies for improvement that better balance the critical elements of price, value, and service.

There is an Ongoing Battle for 

Share of Stomach

 

Seven Consumer Gripes with Loyalty Programs

1.       Complicated Redemption Processes
Many loyalty programs require customers to jump through hoops to earn and redeem points, diluting their appeal. These systems are often point-based, requiring a high threshold before rewards can be redeemed, frustrating consumers and making the programs feel less rewarding. A Deloitte study found that 60% of customers prefer straightforward discounts over points-based rewards, underscoring the need for simplicity.

2.       Minimal Value for Frequent Diners
A large portion of loyalty rewards favor occasional users with enticing sign-up offers rather than regular, loyal patrons. This leaves frequent diners feeling overlooked. For instance, casual dining chains often offer a discount for first-time app users, but long-term customers see minimal added value for their continued loyalty, causing dissatisfaction.

3.       Lack of Customization
Many loyalty programs fail to account for individual preferences, offering rewards that may not resonate with all patrons. For instance, offering a free dessert as a reward may not appeal to health-conscious customers or those looking for beverage discounts. Personalization in loyalty offers could be a game-changer, with industry reports showing that 80% of consumers are more likely to engage with brands offering personalized experiences.

4.       Expiry Dates on Rewards
Programs that impose short expiration periods on rewards—like two weeks or a month—often frustrate customers. This practice makes loyalty programs feel like a chore rather than a reward, leaving customers feeling they need to rush or overspend to claim benefits. Many consumers now seek “value without pressure,” leaning toward brands with no or extended expiration on earned points.

5.       Inconsistent Experiences Across Locations
Brand loyalty can be compromised when customers encounter varying quality and service levels between different locations. This inconsistency often leads to distrust in the loyalty program, as consumers may feel cheated out of the quality and service they expect, making loyalty rewards seem insignificant.

6.       Limited Application of Rewards
Some loyalty programs restrict the types of menu items on which rewards can be used, limiting customer choice and reducing perceived value. For example, limiting rewards to only certain menu items during specific times can create a sense of forced spending, which alienates consumers looking for flexibility.

7.       Privacy and Data Concerns
The collection of customer data, often a prerequisite for loyalty programs, has raised privacy concerns. Many customers feel uneasy sharing personal information for fear of data misuse. Studies indicate that 40% of consumers have opted out of loyalty programs due to these concerns, suggesting that brands need to prioritize transparency in data collection and use.

 

Three Effective Fixes to Elevate Loyalty Programs

To achieve the optimal equilibrium between price, value, and service, brands need to address these pitfalls with consumer-focused strategies that build trust, reward genuine loyalty, and provide meaningful value.

1.       Adopt a Transparent and Personalized Points System
Brands should aim to make point accrual and redemption as simple and transparent as possible. For example, “dollar-for-dollar” systems where customers earn rewards based on money spent, rather than an abstract point system, are straightforward and valued by patrons. Adding a personal touch—such as offering customized rewards based on spending patterns—would allow chains to better serve diverse customer preferences, encouraging long-term engagement.

2.       Implement Flexible Redemption Policies
Loyalty programs should be structured to reward, not penalize, customer behavior. By extending expiration dates on rewards or even offering “no-expiration” points, brands can alleviate the pressure on consumers and make loyalty programs feel genuinely rewarding. Programs that allow points to be used across any menu item, at any time, would remove restrictive conditions and enhance perceived value.

3.       Create a Uniform Customer Experience Across Locations
Training and consistent service standards are crucial to ensuring that the loyalty experience is equitable across all locations. By focusing on training that emphasizes quality and service consistency, brands can build customer trust, reinforcing that every loyalty point earned is backed by a guarantee of quality. Additionally, ensuring customer data security and giving customers control over their personal data will boost program appeal, as recent surveys show that consumers are 60% more likely to participate in loyalty programs that prioritize data privacy.

 

The Price, Value, Service Equilibrium

Achieving a harmonious balance between price, value, and service in loyalty programs can create a competitive edge in a market crowded with dining options. By focusing on simplifying program structures, allowing personalized rewards, and addressing privacy concerns, brands can reestablish loyalty programs as valuable, consumer-friendly incentives.

As the Ready-2-Eat and Heat-n-Eat sector rises, with over 40% of consumers now choosing convenient, fresh-prepared options instead of dining out, the clock is ticking for restaurants to redefine loyalty. Brands that succeed will offer programs that resonate with real consumer needs, strengthening customer ties and fostering a sustainable loyalty ecosystem.

Foodservice Solutions® team is here to help you drive top line sales and bottom-line profits. Are you looking a customer ahead? Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may the clue you need to propel your continued success

Foodservice and Gasoline-Powered Car Ban’s

 

The train has left the building on awareness, acceptance, and approval of the ‘halo’ of better for you around banning new gasoline powered cars.  It’s going to happened is your foodservice brand going to fight it to the end or are you preparing to step up and look a customer ahead?

Momentum is building for the U.S. to ban the sale of new gasoline-powered cars.  Soon, New Jersey could become the second state in the U.S. to enact a ban on the sales of new gasoline-powered cars, following California. Tesla is an aspirational brand and they don’t make a gasoline powered car at all. 

I know, they are just selling 500,000 cars a year and 14.500,000 cars are sold in the U.S. a year.  Back to momentum, all car manufactures are now producing and introducing new electric vehicles. Currently, grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food is driving growth or sustaining sales in every sector of retail foodservice.

When asked if they wanted to cook dinner from scratch or assemble dinner from fresh grocerant niche meal components 91.1 % of Gen Z chose assemble from Fresh Prepared Meal Components and Millennials 83.6 chose meal components. Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions® stated “both gen Z and Millennials value of grocerant niche meal components placing a ‘halo’ of better-4-you around them.”

Since California Gov. Gavin Newsom’s announcement of a ban on the sale of new gasoline-powered vehicles by 2035, New Jersey’s Department of Environmental Protection has called for a similar measure in an effort to reduce greenhouse gas emissions by 80% by 2050. Johnson noted that both Gen Z and millennials who are digital natives are also the most aware, accepting, and will be ready to adopt electric vehicles.  Thus, forcing restaurants, c-stores, dollar stores, and grocerant stores to evolve their business models in three important ways:

1.       Install more charging stations

2.       Increase Grocerant niche meals, and meal component offerings

3.       Innovate packaging options that include the ‘halo’ of Better-4-You

By the way, Oregon Sen. Jeff Merkley and California Rep. Mark Levin have introduced legislation that would require 50% of sales for new passenger vehicles to be zero emission vehicles (ZEVs) by 2025 and end U.S. sales of new gasoline-powered vehicles by 2035, while boosting the market for battery electric vehicles and hydrogen fuel cell vehicles. Note: At least 15 countries have made similar commitments already, including Germany, France and Norway.

Regular readers of this blog know that “consumers never go backwards”.  Are you looking a customer ahead? Do you understand what attributes, values, that drive top of mind awareness around grocerant niche meals and meal components?

For international corporate presentations, regional chain presentations, educational forums, or keynotes contact: Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions.  His extensive experience as a multi-unit restaurant operator, consultant, brand / product positioning expert and public speaking will leave success clues for all. For more information visit GrocerantGuru.com, FoodserviceSolutions.US or call 1-253-759-7869

7-Eleven ups the ante on foodservice with more ‘Evolution Stores’

7 -Eleven understands that customer facing branded products edify the local stores relevance, driving repeat visits, increasing visit frequency, and garners a larger share of stomach according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Johnson stated “7-Eleven continues to expand its grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food offerings, expanding Value, Convenience, and the branded Experience all while leveraging one of the hallmarks of the grocerant niche, mix & meal bunding.

In a new format, described by 7-Eleven as a “real-time, experiential testing ground, the new Evolution Stores house a Laredo Taco Company restaurant offering tacos served on flour tortillas made from scratch daily plus a fresh salsa bar.  Yes, its own branded restaurants as regular readers of this blog know.  

Guest can get made-to-order specialty drinks served up in a full-service beverage format, including hot coffee drinks like flavored lattes and mochas as well as customized cold drinks such as smoothies, agua frescas and cold brew coffee.

 Chris Tanco, executive vice president and chief operating officer at 7-Eleven stated “These new stores are invaluable learning labs, where new concepts are tailored to meet the needs of the communities they will serve from sunny southern California to the fast-paced world of the East Coast," We will continue to evolve based on customer feedback and we look forward to creating the next generation of convenience together."

Battle for Share of Stomach 

So, what all can you find at the new stores? Well, branded beverages, snacks, food, groceries, over-the-counter drugs and non-food items, in addition to Laredo Taco Company, the 7-Eleven Evolution Stores will offer an assortment of exclusive products, services and features customized to the neighborhoods and customers they serve:

1.        Made-to-order specialty drinks that give customers the option to customize their drinks in a full-service beverage format including custom hot coffee drinks like flavored lattes, mochas and more as well as custom cold drinks like smoothies, aguas frescas and cold-brew coffee.

2.        Self-serve specialty coffee drinks with the addition of touch-screen machines that brew custom hot coffee drinks like lattes, cappuccinos, espresso shots and more in just seconds.

3.        Novelty beverages on tap that dispense cold beverages like tea, cold brew, kombucha, nitro cold brew, flavored drinks and more.

4.        Cold treats bar with multiple frozen yogurt and ice cream that can be swirled to create new flavors with multiple toppings.

5.        Cookies, croissants and pastries baked fresh in store daily.

6.        Mobile Checkout: Customers can skip the checkout counter and pay for their purchases via the 7-Eleven app and accompanying 7Rewards loyalty program.

7.        NOW Delivery App: 7-Eleven’s on-demand delivery app allows customers to achieve convenience like never before and have their favorite items like fresh food, beverages, snacks, groceries and household products delivered straight to their door

8.        National brand electronics such as tablets and Bluetooth headphones available for sale from a secure, self-serve kiosk.

9.        On-the-go beauty with expanded skin care, makeup and other health and beauty items.

10.     “The Cellar,” an alcove dedicated to an expanded selection of wines and craft beers, with a nearby growler station that features a rotating selection of local craft beer, cider and ales on tap. Washington D.C. store will not include The Cellar.

For international corporate presentations, regional chain presentations, local educational forums, or keynotes contact: Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions.  His extensive experience as a multi-unit restaurant operator, consultant, brand / product positioning expert and public speaking will leave success clues for all. For more information visit www.GrocerantGuru.com , www.FoodserviceSolutions.us or call 1-253-759-7869

At Taco Bell Value is Out ‘Craving Menu’ is In but will Pricing be a Problem

They call it fast food for a reason.  One of those reasons is given its limited menu most fast food retailers can realign, reset, customer relevance with a new slogan, menu or Limited Time Offer faster than other retail fresh food retailers according Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

It was not long ago that Taco Bell promised 20 new $1 menu items, a goal it reached with the Grilled Fiesta Potato Breakfast Burrito, Spicy Tostada and Chicken Mini Quesadilla. Clearly that was a sign to consumers that Price was it’s number one concern according to Johnson.

Now that the economy is humming along it clear that Taco Bell’s Global Chief Brand Officer Marisa Thalberg wants to realign, reset, adding incremental profit with relevance driven by marketing messaging according to Johnson.

Thalberg is going to introduce a new “Cravings Value Menu” with items ranging from $1 single items to $5 boxes resetting the Price, Value, Service equilibrium according to Johnson.  Starting on Dec. 27, the limited time offer consisting of its Grande Burrito for $1 in two varieties: Chicken Enchilada and Three Cheese Nacho.

This is an effort to move Taco Bell from a focus on price to one of product according to Johnson. Thalberg stated   “As a brand that likes to challenge industry norms, we have really sought to rethink what a value menu should be and the conventions of storytelling for it,”

The company plans to elevate its least expensive menu items with national ads featuring what it promises is “a world that is fantastical and surreal” that discusses “value beyond belief.” The ads will be televised nationally starting Dec. 27 and will also be featured on the chain’s social and digital platforms.

The Cravings menu will continue to have $1 items, including the Spicy Potato Soft Taco, Cheesy Bean & Rice Burrito, Beefy Fritos Burrito, Triple Layer Nachos, Cheesy Roll-Up, Spicy Tostada, Shredded Chicken Mini Quesadilla and Beefy Mini Quesadilla, along with other items.  It will also be rolling out more $5 boxes.

How well will it work with Christmas bills coming due in January and a looming trade war?  Well we will just have to wait and see.  I want to thank all of you who have asked about this promotion and it’s timing.

Interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization? Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information.

The 65 Inch HDTV Syndrome Continues to Disrupt Retail Foodservice

Foodservice Solutions® recent Grocerant ScoreCards continue to indicate that at the intersection of the consumer, technology and retail food sales we find the grocerant niche creating and expanding points of quality food distribution according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  

 It’s at that intersection that Foodservice Solutions® Grocerant Guru identified one universal commonality driving consumers buying pattern changes with the latest Grocerant ScoreCard finding that 83.2% of meals service at home include at least one Ready-3-Eat or Heat-N-Eat fresh food meal component. 

Johnson calls it and extension of the “The 65 Inch HDTV Syndrome he identified, quantified, and qualified back in 2012.

The grocerant niche is the result of the blurring line between restaurants, grocery stores, convenience stores, and drug stores all selling fresh prepared, portable, convenient meal solutions.  Targeted at the time-starved consumer with Ready-2-Eat or Heat-N-Eat fresh prepared food components that are perceived “better for you”, and portioned for one or two. Consumers like the Convenient Meal Participation, Differentiation, Individualization / Family Customization that these retailers offer.

Restaurateurs need to be particularly mindful of developments within grocerant niche for they are driving the change within the price, value, service equilibrium in retail foodservice.

It is at the intersection of the consumer, technology and The FIVE P’s of Food Marketing: Product, Packaging, Placement, Portability, and Price that retail food sales competition is expanding.

GrubHub the nation’s number one online and mobile food ordering service data reveled that pre-game orders spiked more than 35 % for the first four weeks of the 2012 professional football season when compared to the same timeframe during the 2011 season and sales continue to clime.    “When it comes to watching football, the best seat in the house really is at home,” stated Susanne Dawursk, GrubHub’s brand marketing director.

More than just sports The 65 inch HDTV Syndrome is driving customers away from frozen foods as well. In a study from Packaged Facts, reports that sales in the $44 billion U.S. retail market for frozen foods have been flat to declining, with nearly all dollar sales gains attributable to inflation or new products -- not to increased consumer demand. The study found that Preference for 57 % of consumer say fresh foods the top reason why US consumers have not purchased frozen foods in the last three months, followed by preference for home-cooked meals.

Fresh prepared ready-2-eat and heat-N-eat food in non-traditional outlets poses an ever increasing threat to restaurant growth. Want to know how to best address the 67-inch HDTV Syndrome? 

For international corporate presentations, educational forums, or keynotes contact: Steven Johnson Grocerant Guru at Tacoma, WA based Foodservice Solutions.  His extensive experience as a multi-unit restaurant operator, consultant, brand / product positioning expert and public speaking will leave success clues for all. For more information visit www.GrocerantGuru.com , www.FoodserviceSolutions.us or call 1-253-759-7869

Look for a Strong Q4 from McDonald’s

Sometimes life is good and the fall McDonald’s franchisee will be happy with the return of the McRib one of the restaurant industries best Limited Time Offers in the minds-eye of McDonald’s customers and franchisees according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

The McRib for those of you who do not know is a seasoned boneless pork, barbecue sauce, onions and pickles on a hoagie-style bun – was last on menus in November 2017; and was first launched in 1981.

Hedging it’s bet on Q4, McDonald’s also unveiled its new value offering a $6 Classic Meal Deal. It launches on Nov. 1 for a limited time at participating restaurants nationwide. The $6 Classic Meal Deal is comprised of one of four McDonald’s menu items – Quarter Pounder with Cheese, Big Mac, 10-piece Chicken McNuggets or Filet-O-Fish – along with any size soft drink or sweet tea, a small fries and a seasonal or apple pie.

The hedge is the McRib will ease the pain of the PRICE hike in the meal deal from the current industry standard of $5 a meal to $6 a meal?  Regular readers of this blog know what happened to Subway when they tried to back away from the $5 foot long that created the customer platform of the $5 Meal Deal.

When McDonald’s CEO Steve Easterbrook stated “The environment is competitive around value,” he was 100% correct.  Easterbrook continued “It’s a market share fight on traffic,” “We don’t see many people out there in the sector growing traffic. It’s a scrap. It’s a market share fight.”

The team at Foodservice Solutions® believes McDonald’s marketing power will elevate the dinner meal deal driving incremental sales and moving consumers from the $5 price point to acceptance of a $6 price point and not only will that be good for McDonald’s it will benefit all fresh fast food retailers. 

The simple fact is according to Johnson in 2019 What’s good for McDonald’s will be good for all fresh food retailers. Success does leave clues and McDonald’s marketing messaging, limited time offers, edifying brand relevance will once again be the platform of retail envy.

Interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization? Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information

At Tijuana Flats Differentiation Means Familiar

Success does leave clues and regular readers of this blog know that Steven Johnson our Grocerant Guru® regularly states that “in food retail differentiation does not mean different it means familiar’. Tijuana Flats has picked up the right clue as it rolled out a summer Limited Time Offer (LTO).  The new menu item is Dos Cheeseburger Tacos, which includes two tacos with seasoned fries, for just $7.89.

Yes, Tijuana Flats is bringing together the best of both tacos and burgers this summer for one epic mash-up of deliciousness with the Cheeseburger Taco. The LTO  is available at all Tijuana Flats locations from July 30–September 9.

As you can see from the picture and the description differentiation does not mean different.  The Cheeseburger Taco is a tasty concoction consisting of a tortilla filled with seasoned ground beef, cheese, lettuce, tomatoes, pickles, ketchup and mustard. Instead of chips, Flats fans that order the Cheeseburger Taco will receive a side of seasoned fries and queso.

Throughout the summer, Flats guests can order Dos Cheeseburger Tacos, which includes two tacos with seasoned fries, for just $7.89. Fry lovers (and who isn’t a fry lover?) can get a side of fries for $2.99, an order of fries and queso for $5.29 or upgrade Flats chips to fries on any Flats dish for just $0.99.

Rick Van Warner, CEO. “We know Flatheads love a good twist on a classic dish, and we can’t wait for our guests to dig into the best of both tacos and burgers at Tijuana Flats.” How is your brand edifying it’s relationship with consumers? 

Are you trapped doing what you have always done and doing it the same way?  Where is your new electricity coming from?  Interested in learning how www.FoodserviceSolutions.us can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information.