Restaurant Trade Area Research

Hello RTAR fans - sorry for the lack of posting - but today, 2011 and this blog starts anew once again. First, I want to thank everyone for their support in 2010: indeed, as you can see from this link - this blog remains in the top Alexa Rankings -  
http://www.alexa.com/siteinfo/restauranttradearearesearch.com# thanks to your interest and support. Please share RTAR with others.

Anyway, tons has happened in six weeks so let’s get started:

First, McDonald’s has been continuing it sales increases - partly thru dead on new product introductions that capitalize on the only segment that is growing - breakfast; and health - McDonald’s Offers New Fruit & Maple Oatmeal - http://www.restaurantnews.com/mcdonalds-offers-new-fruit-maple-oatmeal/ and this link talks about just how BIG the Happy Meal is to McDonald’s - Just How Happy Does the Happy Meal Make McDonald’s? - http://adage.com/article?article_id=147271 - how about sales bigger than IHOP? Wow.

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Indeed, this article wonders: Can Starbucks Adapt Like McDonald’s Has? - http://blogs.forbes.com/investor/2010/11/04/can-starbucks-adapt-like-mcdonalds-has/

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Indeed, the coffee giant may want to keep an eye over their shoulder as Dunkin’ Brands Opens Its 16,000th Location Worldwide - http://www.restaurantnews.com/dunkin-brands-opens-its-16000th-location-worldwide/

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General Restaurant News, Trends - Alcohol Sales at Restaurants and Bars Expected to Increase by Nearly 2 Percent in 2011 - http://www.restaurantnews.com/alcohol-sales-at-restaurants-and-bars-expected-to-increase-by-nearly-2-percent-in-2011/ – and here is a real interesting look at basics: Marketing Sense Isn’t the Same as Common Sense - and uses Little Caesar’s as it’s kicking horse - http://adage.com/columns/article?article_id=146846; meanwhile, Trendspotters Pick Top Five Food Trends at Winter Fancy Food Show - http://www.restaurantnews.com/trendspotters-pick-top-five-food-trends-at-winter-fancy-food-show/ Belgian Waffles and Tea for example.

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Meanwhile, the industry as a whole continues to sputter in a horizontal mode - Restaurant industry sees slow recovery - http://www.suntimes.com/business/3485891-420/restaurants-percent-industry-npd-chicago.html - highlights from this link includes HARD Data like this:

Sometimes one has to wonder at the length of time it takes some chains to respond to favorites of other chains - especially when in direct competition with - and IMO, that is what the D.T. Double is. That said, better late than never — will BK figure it out next? (Or was that the Big King?) And, that said, I’d love to be eating a Big Boy at Frisch’s - http://www.nrn.com/article/wendys-tests-dt-double-texas-rhode-island - special `sauces’ on Burgers - not new, but quite compelling.

And, Wendy’s is not thru the testing above either - here’s a new Burger too (upscaled) and those can’t miss TV ads for the new Sea Salt Natural Fries -  http://www.slashfood.com/2010/11/10/wendys-new-daves-hot-n-juicy-cheeseburger-and-sea-salt-fri/?icid=main%7Chtmlws-main-w%7Cdl3%7Csec4_lnk2%7C183477

It’s news that is a month old from the elections - San Francisco bans Happy Meals - :Under the ordinance, scheduled to take effect in December 2011, restaurants may include a toy with a meal if the food and drink combined contain fewer than 600 calories, and if less than 35% of the calories come from fat. - http://www.latimes.com/business/la-fi-happy-meals-20101103,0,5438230.story

In Italian Restaurant news - OpenTable Diners Reveal Their Top Fifty Italian Restaurants Across the U.S. - http://www.restaurantnews.com/opentable-diners-reveal-their-top-fifty-italian-restaurants-across-the-us/ and one more OpenTable link - http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/10/02/BU8S1FN0O8.DTL – OpenTable coupons follow Groupon’s lead

Check the sidebar for more to consider.

As you know, - when this was announced I KNEW it was a winner - read more about the details here and why Denny’s has committed to a 3 year run with this relationship. http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=130303 - great customer targeting here.

The Happy Meal regulations - http://www.daily49er.com/opinion/happy-meal-regulations-1.2264397

Double Dip After all? - The hard real data about our economy - http://modeledbehavior.com/2010/06/23/double-dip-after-all/

Having `connections’ with customers and people in general in this new normal is important for the restaurant category - and - Folks Restaurant in Woodstock Georgia - like many brands - `needs users’ - and anything that gets them coming to the restaurant is `good business’ (or a sign of desperation?) - so, why not try to cater to those `Bingo’ fanatics.

Another idea in Woodstock was the recent `reservations only’ Father/Daughter Date Night at Chick-Fil-A — `two more restaurants that are `using the works’ - in the new normal.

More links too:

Bojangles’ Gives Big Awards to Top Locations - and the winning location got 10 Grand — cool — http://www.qsrmagazine.com/articles/news/story.phtml?id=11117

Here’s an epic article about McDonald’s effect on the world - Happy meals: Why McDonald’s has been a positive force for change - http://www.independent.co.uk/life-style/food-and-drink/features/happy-meals-why-mcdonalds-has-been-a-positive-force-for-change-1972152.html 

Want to see some recent (June 7th) on the street research with a 50 year old male who by 2 pm had already eaten at two fast food restaurants? — http://www.youtube.com/watch?v=T2H_pEFuSSo - If you want feedback on your brand contact me at 678-467-8650

Last year, I personally interviewed several thousand fast food customers (in-store and drive-thru) in a variety of fast food brands for Trade Area Research purposes. (Do you need trade research before expanding your market?) This was normal for me as I have  personally interviewed thousands of fast food customers for dozens of years. And, as you might know, certain questions are nearly standard on questionnaires trying to understand customer behaviour - such as the fast food restaurant that the customer uses `most often’.

In the 1980’s and even into the late 1990’s - when adults answered that question for me — when the answer was McDonald’s - they would immediately offer a `reason’, in an apologetic tone, which invariably was `the kids’. That is not to say that I didn’t hear `they are everywhere’ and `they are cheap’ on occasion. Nevertheless, the interesting thing was that `other brands’ such as Wendy’s or Arby’s or Chick-Fil-A  or others (such as sandwich chains Subway) - most often users ALMOST NEVER offered up `embarrassing’ reasons for their usage of a particular brand most. Only McDonald’s. It was almost a case of doing `marketing’ too well.

Then, McDonald’s focused less on kids and more on product and product quality. I began to hear folks say that they liked a `particular new product’ at McDonald’s that they went for `most often’. Kids, as a reason, was definitely fading quickly (I informed my clients who at first seemed surprised in the early 2000’s — it was the kind of information that only came from literally being on the ground for multiple brands for decades) - the return of McDonald’s was approaching.

The moral - If the biggest can change a negative perception — other brands, most of which have neutral images, can also build a positive one - like McDonald’s has done.

Today’s Restaurant Links

“People are requesting kids premiums that are more socially responsible,”

http://www.ajc.com/business/content/business/stories/2008/08/16/restaurant_toys_educational.html Wendy’s and Chick-Fil-A jump on `Educational’ kids toys. Strong feedback. Three minute read.

Individual Responsibility And Its Enemies

http://www.mtexpress.com/index2.php?ID=2005122089  Bringing ethics into the fast food discussion with force. Shows how `choices’ and having a restaurant business are related. Three minute read.

Parking Mad At McDonald’s

http://icwestlothian.icnetwork.co.uk/courier/news/tm_headline=parking-mad-at-fast-food-chain&method=full&objectid=21526230&siteid=92284-name_page.html After the positive McDonald’s opinion above - here is an example of not respecting the customer. Probably.

Arby’s Expands Savings Potential With Cellfire Mobile Coupons

http://money.cnn.com/news/newsfeeds/articles/prnewswire/200808130900PR_NEWS_USPR_____AQW047.htm Here’s a new coupon niche.

Are Restaurant Stocks A BUY?

http://www.chicagotribune.com/business/yourmoney/chi-ym-restaurants-0817-cpaug17,0,4787885.story Article says yes if you have a longer time horizon of 2-3 years; while detailing how over stocked the trade areas are with restaurants. Predicts store closings. Four minute read.

Many Many more - current links below. Bookmark and return please. Leave a comment if you wish.

Hello, welcome back. This blog is one of the few on the internet about restaurants by a real market researcher of fast food restaurants. I’ve been sharing some insights and I hope you bookmark my blog and return on a regular basis.

Today’s post is dependent on the previous two posts - so, you may need to dig down for a fuller understanding. Essentially, I’ve been outlining some specific REAL information from about a decade ago for a 3 store FF brand that had sales of @2,670,000.00 combined. And, in the last post I revealed the actual size of the combined customer base - based on my Customer Base Formula. Today, I’d like to show what that MEANS in terms of spending by any individual customer within a specific frequency of usage scale. For example:

49 - 4x’s a week users - spend 80,000.00 per yr - @1.6k yr-130mo-31 week

400-2-3x’s week users - 348,000.00 per yr - @870.00 yr - 72mo-16 week

1,800 - Once a wk users- 642,000 yr - @357.00 yr - 30mo - 7 week

3,600 - Once every 2-3 wks - 642,000 yr - @177.00 yr - 15mo - 3.40 week

3,700 - Once a month users - 321,000yr - @86.00 yr - 7mo - 1.66 week

5,400-Once every 2-3 mtn - 241,000yr - @ 44.00 yr - 3.68mo - 85cents/wk

2,100-Once every 4-6 months- 26,000yr - @12.00yr - 1.00mo -24cents/wk

21,700-Less than every 6 mo - 187,000yr - @8.61yr - 72cents a month and 18 cents a week

These stores had 7% first time users spending about 187,000 a year — 2,100 new customers a month or about 25,000 new customers in a year.

Now, just to ask you as a  restaurant owner — if you knew that @21,000 of your 38,000 customer base spent less than 9 dollars a year at your store - would you be willing to try a method to change it? IF SO, give me a call on my cell ——– you can find that information by going to my site about Trade Area Surveys — www.squidoo.com/tradeareasurveys

Now - today’s restaurant links.

“…nutritious fast food. Maybe it’s not so bad after all.”

http://blog.nj.com/parentalguidance/2008/07/i_was_wrong_about_fresh_apple.html Maybe, just maybe, the Tide is turning.

“…research from Just Kids Inc’s Global Kid Study, which showed that children daydream about helping others and are becoming more altruistic.”

http://www.brandrepublic.com/News/838897/McDonalds-launches-conservation-themed-Happy-Meal/   Perhaps someone will beat McD’s at this in the states?

Economic Slowdown Forces Choices in Food

http://www.ausfoodnews.com.au/2008/08/12/economic-slowdown-forces-trade-down-in-food-spend.html   Holds true worldwide.

Panda Express Thrives On Orange Chicken

http://www.latimes.com/business/la-fi-panda13-2008aug13,1,3381302.story Success story - focused on customers.

That’s all for today — remember to bookmark this page. Thanks.