Sunday, December 10, 2017

Pricing Drives Restaurant Customer Count Declines

The restaurant sector sales for continue to remain flat to slightly positive according to Victor Fernandez, executive director of insights and knowledge for Black Box parent company TDn2K.  Fernandez like most of us is more concerned with same-store traffic during last month that declined by 2.5%, continuing a long-term problem. 
While Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions® points out that companies the ilk of Dollar General’s sales are up 11% as they evolve their retail strategy to go beyond “paycheck to paycheck’ customers to those buying “meal to meal” as the WSJ reports that strategy has allowed them to become one of America’s most profitable retailers garnering food customers from both the restaurant sector and grocery sector.

Johnson sites price for customer migration while Fernandez sites to many restaurants.  Johnson stated the battle for share of stomach continues and fast food companies and non-traditional fresh food retailers that focus on price continue to garner a larger share of stomach or legacy restaurants and grocery stores.

Foodservice research icon Bonnie Riggs of The NPD Group, reports that after six consecutive quarters of flat or negative traffic, growth at quick-service restaurant (QSR) burger and gourmet coffee chains drove total foodservice industry traffic to 1 percent for the quarter ending in September. 

Riggs stated “The marketing initiatives and marketing clout of the QSR leaders turned the industry in a positive direction this past quarter,” “What they promoted found favor with consumers, and they should keep it up.” Regular readers of this blog know that what they promoted was PRICE!

Johnson went on to say that watch for an up-tick in promotions throughout the restaurant sector and once again a decline in core pricing at traditional grocery stores creating a platform consumers will like, but will cause continued disruption within both the grocery sector and restaurant sector well into 2018.

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