Grocerant niche customers don’t like two-tiered pricing according to Steven
Johnson, Grocerant Guru® at
Tacoma, WA based Foodservice
Solutions®. While consumers embrace food when they Dine-In, or opt for Take-Out,
while using Online Ordering / mobile ordering or even a App, even when electing
Delivery, Curbside Pick-up, or something in between.
Economic
upheaval continues to linger with employment instability in the U.S to Germany,
India, Greece, to South Africa. In developed countries the unstoppable stock
market is creating uncertainty and disillusionment as restaurant same store sales
lag well behind last year’s numbers in most cases. Fast Food restaurants are still aspirational
for many consumers around the globe.
Recently Foodservice Solutions® grocerant scorecards found consumers are
confused with the price of a many food items.
When asked about the price of a single entrée 73.1% of consumers
responded the entrée was priced High.
When asked about a bundled meal deal 46.9% of consumers said the price
was high.
However; let’s not get confused about two-tiered pricing. What is Two-Tiered Pricing within the food
space in the minds-eye of the consumer.
Two-Tiered Pricing A: When the price a
food outlet sells an entrée for within the store is different that when they
order it online or for takeout. Not a good thing.
Two-Tiered Pricing B: When the menu or
grocerant niche Ready-2-Eat and Heat-N-Eat meal components offered by the retailer
not within the set range. Here is an
example a Dollar Menu with 10 items and the rest of the menu 20 items that sell
for $ 4+. Not a good thing.
Johnson
notes that over the years Foodservice Solutions® grocerant scorecards have indicated
that brands do the best that have one set pricing focus. Consumers are looking
at brands that have “the same or stable pricing with all entrees or bunded meal
deals to be within a “new middle” for that brands menu options and messaging.
While two
tier pricing was once required by global brands. Today branded food retailers need to garner
new customer’s they have learned that it is best not to focus on the either end
of spectrum to sustain growth to sustain growth. It is more important for the brand messaging
and menu or meal component pricing to consistent with each other.
While the The
Euromonitor put it this way. “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 …
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. “
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 integral to the
success of any new fast food concept….
The universal commonalities in Reay-2-Eat and Heat-N-Eat
fresh prepared food are fueling retail success around the globe. Do you have a pricing strategy? What is your
growth rate? Everyone needs to think
about global food growth leader Aldi says daily “Poor People Must Save, Rich
People Like To”. What your brands price messaging?
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 GrocerantGuru.com, FoodserviceSolutions.US or call
1-253-759-7869
Battle for Share of Stomach
