Sunday, May 6, 2018

McDonald’s is Winning the Price, Value, Service Equilibrium

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 can help. Contact:

No comments:

Post a Comment