Restaurant Trade Area Research

The evidence is starting to pile up about one response to the new normal is that Fast Food brands should enhance the  restaurant experience available - almost regardless of price point - because in large part it is aimed at those `trading down’ from the sit-down and tip waitress at lunch segment - and at the already existing non-tip fast casual (such as a Five Guys).

Examples include Wendy’s new redone Premium Salads priced at around 6.00 - and the large variety of `Angus’ Big Burgers available at most of the major chains now. (Can Buffalo Burgers be far away?) It would also include the upscaling of Milkshakes at Chick-Fil-A and Hardee’s - to the recent bone-in BBQ of Burger King - to the upscaling, at least perception wise, to many McDonald offerings such as the yogurt choices and coffee.

These new positionings, which often include a dash of health perceptions mixed with a sprinkle of indulgence, can be fairly and profitably priced within the fast food price points compared to fast casual and especially when compared to ANY RESTAURANT THAT DEPENDS ON TIPS FOR ITS EMPLOYEES. As today’s customer, in the new normal, is no longer disregarding any `additional charges’ as frivolous.

Indeed, when today’s restaurant using customer sees a Chili’s ad about the Burgers choices (with fries) starting at 5.99 - they know that - even getting water (the continuing trade-down) - that with tax their bill will be pushing 6.50 - which with tip (can you really tip under a dollar in a sit-down environment with table cloths) would be another buck (or two to not look cheap) - making the 5.99 advertised price point, more like 7.50+ and they are still drinking water. (The 1.79 and up prices on drinks at these places do them no help perceptually either). Indeed, throw in the drink, tax, (and now a two dollar tip) and you are talking 10.00 nearly - for the cheapest 5.99 advertised price point.

And, perceptions like that - add up to Fast Food brands having some opportunity for brand extensions with good profit price points. Doing this, while retaining the `value’ and yes - even the `dollarish’ price points too. (Dollarish (things under 1.49) would be a fun positioning.)

Lastly, since the new normal could be here for years and years, expect this trend in Fast Food brands to be a continuing process as brands find profitable brand extensions once thought of as not possible or too out of character for FF. Does this mean `value sized portions’ of something as exotic as `Prime Rib’ - before you say impossible - remember, this is the new normal. Crabcakes anyone?

Here’s some thoughts of a 50 year old multi time a day FF eater - http://www.youtube.com/watch?v=T2H_pEFuSSo - and more about my services is right here www.squidoo.com/tradeareasurveys too.

http://www.scootaboutkneescooters.com/images/prices-slashed.gif

Well, that is a little of an exaggeration perhaps - but what they have done is get the new lower price point in front of the public AND have brought clarity in pricing to the pizza category - mediums now start at 8.00 with up to three toppings. —- Along a related front - amazingly, we travel thru yet another summer without one major FF chain matching McDonald’s 1.00 Iced Tea prices. Amazing.

Now, you know RTAR loves surveys and especially the results of surveys - like this one - Cracker Barrel Receives Top Ratings in National Independent Consumer Study - http://www.restaurantnews.com/cracker-barrel-receives-top-ratings-in-national-independent-consumer-study/ - not only that Cracker Barrel won 31 of 50 rated attributes.

And, in another study - US Restaurant Count Down by 5,204 From Last Year, Reports NPD - that is about 1% of all restaurants and the first decline since the study began in 1976 - The new normal settles in.

Here’s a new Carl’s Jr. & Hardee’s product sure to grab some headlines - The 12 Inch BURGER - http://www.usatoday.com/money/industries/food/2010-07-16-footlong16_ST_N.htm 

More new products - WENDY’S Upscales Salads - http://www.restaurantnews.com/wendys-introduces-new-line-of-premium-salads/ - will upscale price diminish results?

More links tomorrow.

Hello, welcome to Restaurant Trade Area Research (RTAR) - today’s topic is the `light’ user. NO, I’m not talking about the infrequent user this time - I’m talking about the customer who purchases `just’ one item. This typically will be the `sandwich and water’ purchaser, the `drink only’ purchaser or the `dessert only’ purchaser. And, in this economic environment - many are forced to `price down’ to even go to FF restaurants.

So, what are you to do as a FF operator to `bump up’ these folks? Actually, this is a real easy group to directly market. After all, you already know their order - so, let’s say that you have your typical inside customer who is a `sandwich and water’ person: to that person goes a bounceback 49 cent drink offer with sandwich purchase. And, for the drink only purchaser - yep - 1.50 off their next combo or similar offer (1.00 off order over 4.00). The dessert purchaser - a buy one dessert get one at half off. You get the idea.

So, simple marketing 101 - directly work with your actual customer base - and - directly target segments to produce higher ticket totals. Also, having that coupon burning in their pocket may even make that next visit sooner.

Other links:

Customers given too many choices are 10x less likely to buy

http://sivers.org/jam Very insightful research into purchase patterns.

http://www.idsgn.org/posts/pizza-the-hut/ Pizza Hut — The Hut - does a re-design of image.