Restaurant Trade Area Research

I had seen the billboards, but had somehow missed any TV ads for the new Wendy’s `W’ Burger. So, when I eventually did see the TV ad, and it showed the `special sauce’, - my mind instantly went off as a lover of the Big Mac for nearly 50 years. When aware of that fact, the sauce, - which I did not pick up from the billboards - in only days I stopped to try the `W’.

Now, interestingly, only days before I had paid 3.91 including Tax for a Wendy’s single at a drive thru - my visit having been since the `improvement’ - therefore I was tasting, to me,  a new offering.

And indeed, the single was `upscaled’ in my opinion (and I’ve been eating singles since the early 70’s in Ohio)  - but, in all honesty - 3.91 is a stretch for the product. So, with that in my mind - I went IN this time and ordered the W (making it a combo) for only a little over a buck more than the Single alone.

I was immediately impressed with the sandwich and LOVED the `positioning between the Big Mac and the Whopper’ (even moreso if any BK’s still have the `King’ - their version of the BM) — LOVED the positioning. Indeed, my mind thought, WHY  are they not positioning it that way too?

Indeed, the sandwich,  HASN’T what McDonald’s I’m sure would love to be able to dump - the extra slice of bread between the two patties; thereby giving lots of meat ratio in every bite in comparison. Wow.

Yet, the sandwich was uniquely targeted at the whopper too - with the larger lettuce piece(s) and tomato. And, at that time of eating the `W’,  I thought that McDonald’s better have some concern about this sandwich, - pulling from it’s very core oldtime base customer. All in all - I was impressed.

My second time was nearly as good as the first and was only two days later,- but, I got this one to go, with no sides or drinks - paid less than before - had a better sandwich value in my mind than the Single OR Big Mac; - but realized that for WENDY’s the tradedown would have to be a hit to the bottom line IMO; especially in comparison to the probable profit margin on the Single. (Then wondered, is that why they aren’t pushing this product?)

Then, weeks later, I went inside for another combo, and by chance, it was while a unit was having operation problems (At Trickum In Woodstock, on a Saturday) - the manager on duty was yelling loudly at the crew about being prepared in advance. It startled the folks in line it was so loud. I hoped no one would walk off the job as the place seemed understaffed and the wait was already mounting.

However, the real letdown was upon opening the `W’ - gone were the lettuce and tomato - (I had asked for some extra sauce on it and it was swimming in it) - one little slice of onion, NOTHING else. It was a total turn off and problems were only mounting at the line and counter so I simply ate it.

Interestingly, I said to the counter girl - `how much would it cost if someone asked for the sauce on a Single’ - she said it would be FREE as all toppings are free. For some reason the answer surprised me - could some just as easily ask for Big Mac sauce on a dollar hamburger? Or, the Wendy’s 99cent offerings?

So, I haven’t been back - it’s been a few weeks and probably a bit longer than normal for my Wendy’s visits (prior to W usually a single combo): and as you can see from the link - others are not so impressed with Wendy’s either as in this recent article saying it would http://www.dailyfinance.com/2012/01/12/why-wendys-will-never-be-great-again/?icid=maing-grid10%7Chtmlws-main-bb%7Cdl3%7Csec1_lnk3%26pLid%3D127010 never be great again.

I wouldn’t go that far - but - the positioning of the W could have been structured  a lot better to attract actual new customers from their main competitors IMO. Heck, SELL the sauce in the store in jars - like Big Boy.

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These Two Guys Had The Same Impression As Me On First Tasting http://www.youtube.com/watch?v=sYK1La1bdHA

Hello Folks - still in the summer clearance mode - but, today, with a bit more commentary on occasion than the last three posts.

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First up is something that I’ve been cautioning about and now has some evidence to back it up - Too much customer contact can hurt business - http://www.physorg.com/news/2011-07-customer-contact-business.html - the study indicates the IDEAL number of calls, e-mails, or mailings a customer base will tolerate before reacting negatively. Food for thought. ———— Next, Is the `Better Burger’ bubble about to burst? That is the premise of this article, but, IMO, NO, as the fast casual will expand until the business model of `no tipping’ is adopted by some brand of `casual’ restaurant to combat the Fast Casuals. Anyway, good article and again, food for thought - http://features.blogs.fortune.cnn.com/2011/06/17/the-end-of-the-%E2%80%98better-burger%E2%80%99-bubble/ ———- More data about the restaurant habits of Americans in the new normal - a great study - Unemployment Makes IHOP-to-Red Lobster Target Higher Incomes - http://www.bloomberg.com/news/2011-06-09/high-unemployment-makes-ihop-to-red-lobster-target-higher-income-customers.html – indeed, here’s a tease:

Spending on Takeout

Households that earned more than $70,000 in 2009, about 32 percent of the U.S. population, accounted for 55 percent of spending on takeout and food away from home, according to the most recent data available from the Bureau of Labor Statistics.

Consumers making less than $40,000 — or “aspirational diners” — cut back on eating out about five years ago and have yet to rebound much, Knapp said. This “erosion of frequency” among lower-income households forced executives at quick-service and casual-dining restaurants to figure out how to broaden their appeal as the market began to weaken in 2008, he said. Now, many of their plans are becoming reality.

More soon.

Sodapalooza is what the billboard sign screams in East Cobb, Georgia - it’s the new 49cents drink promotion at Race Trac http://www.racetrac.com/AwesomeDeals.aspx - a southeastern convenience store chain. Indeed, the competitors price is all of 59cents this summer (Quik Trip) I believe. And, as we all know McDonald’s has had 1.00 any sweet tea (occasionally all drinks too) of any size.

Unbelievably, to me, the reluctance to challenge McDonald’s great positioning continues with few exceptions. In Atlanta - Sonic, Steak and Shake and Chick Fil A - all have a dayparted two for one in the afternoon (do you ride around with others in the afternoon?) non-meal hours. While a reaction, it is somewhat whimpy. And, no other FF’s even seem to `get it’.

Hence, the huge rise in `drinkless’ FF orders (those so-called value combos eventually saved the average consumer nothing or perhaps a quarter and users knew that it had become more of an ordering and operations way of pigeonholeing consumers) — which has even given way to `sandwich only’ orders in the New Normal.

Consumers remember the days when Iced Tea was just coming onto FF menus — and IT WAS ALWAYS CHEAPER — much cheaper. What ever happened to that? Are FF outlets really going to lose money IF they `re-position’ drink prices? What if `any size drink’ was 79cents with a full priced sandwich? Wouldn’t that be easy? Certainly better ideas exist to return the drink to the orders than what is currently being marketed by nearly all FF brands.

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The last one that needs to be told is you - right? - http://www.nytimes.com/2011/03/04/business/media/04adco.html?_r=1 - from the article: “there tends to be a correlation between gasoline prices and Q.S.R. sales”

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This could be helpful - Five Restaurants That GET Social Media - http://www.huffingtonpost.com/wiley-cerilli/social-media-marketing-5-_b_835294.html#s253220&title=Zengo - (slide presentation)

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Meanwhile …. Restaurant Chains See Growth Despite Economy - http://www.restaurantnews.com/restaurant-chains-see-growth-despite-economy/ - Highlight: Top 500 Chains Up 1.8% in 2010. Huge differences by segments.

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Newsworthy study - Study: Hispanics Reward Kids with  Salty Snacks - http://www.qsrmagazine.com/news/study-hispanics-reward-kids-snacks - and other findings about the fast growing segment.

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Price Marketing, Customer Connection, - Popeye’s `Pay Day’ Deal - ONE DAY Only - Tomorrow - (3-23) - http://www.restaurantnews.com/popeyes-cooks-up-one-day-only-pay-day-deal/ – 8 pieces/4.99

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Nine reactions to the new Arby’s Campaign `Good Mood Food’ - http://pjlehrer.blogspot.com/2011/03/do-you-feel-guilty-when-you-eat-fast.html

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Continuing the theme that fast food is `good’ - such as KFC’s slogan - “That’s So S-O G DoubleO D Gooood” - Arby’s has launched its latest effort with `It’s Good Mood Food’. ——— This positioning statement  brings to life the brand’s positioning – “Exciting tastes you can feel good about … every day.” http://www.restaurantnews.com/arbys-announces-new-its-good-mood-food-marketing-campaign/ - “This campaign is focused on our target audience, Balance Seekers, who want and need to eat fast food because of their busy lifestyles, but do not want to feel guilty about eating it. They’re telling us that Arby’s has something over other fast food restaurants… a balance of higher quality, more wholesome food that they can feel good about eating,” said Steve Davis, chief marketing officer, Arby’s Restaurant Group, Inc. “We like to think that stopping by Arby’s makes their day a little brighter. With this campaign, we’re recommitting our team to inspire good moods each and every day.”

Whereas the rollout was given this treatment at NRN - http://www.nrn.com/article/arby%E2%80%99s-puts-premium-beef-menu - Robert Kraut, Arby’s senior vice president for advertising and marketing communications, said the sandwich was targeting about 35 percent of Arby’s customers — those heavy fast food users “who don’t necessarily feel good about the choices that are available to them” and are looking for something that’s better for them than a hamburger, but not necessarily a light meal.

Here’s a link to a sample commercial - http://www.youtube.com/watch?feature=player_embedded&v=Gzz0wY2Vobk

The Arby’s moves are not limited to a new commercial flight with a new set of words to absorb, as Arby’s has finally moved into THE premium word associated with Beef - Angus - with a Angus Three Cheese & Bacon Sandwich. It may be the first of several Angus choices in the future. Prices are 4.99 for the sandwich. Robert Kraut, Arby’s senior vice president for advertising and marketing communications, said the sandwich was targeting about 35 percent of Arby’s customers — those heavy fast food users “who don’t necessarily feel good about the choices that are available to them”Arby’s is also now offering a 1.99 side salad with two types of lettuce, cheese and tomato that can be substituted for Fries in the combo pricing. And, a premium summer milkshake is ready in the wings. Finally add to that the new `Steakhouse’ onion rings and new bite size breakfast dessert - and lastly new pep rallies and crew trainings designed to make the customer’s day special - and you have nearly a whole new focus and intensity. (Will they be SHOUTING hello and goodbye like at the local Capt. D’s?)

So, what’s my take on it all?

Well, first, it’s important to note that Arby’s HAD to do something new -  as the impact of the `new normal’ was about as steep on the brand as for any of the major FF players. And, in general, Arby’s follows thru with playing catch-up to some of the major trends such as premium Angus offerings, a premium side salad that is substitutible for combos - and something new during breakfast - finally becoming a competitor for all three positionings with other FF brands. Additionally, the more upscale Onion Rings and `unique’ but I’m not sure premium Milkshake offerings are steps in the right direction and competitiveness in terms of Milkshakes. (Who ever thought Milkshakes would be NEW again?)

So, Arby’s has followed thru to continue to enhance the `quality food’ perception advantages it once was semi-privy to in the FF arena; but, had lost it’s advantage of having, due to chains like McDonald’s `upscaling’ of various items; and, similarly priced sandwich chains such as Panera Bread or Atlanta Bread Company upscaling at comparible non-tipping prices.

And, the 4.99 pricing of the Angus sandwich is something that should add to franchisees bottomline - something much needed with the addition of the 1.00 and low priced value choices - pushed hard last year to establish a market presence at the price point against long time players.

I also like the slogan more than some of Arby’s recent offerings such as `I’m Thinking Arby’s’ or `I’d Marry A Goat’ or that 5.01 combo pricing, or Tastes Growing Up.  At least this slogan is talking about the food, a long time Arby’s advantage and attribute needing a revival in the Arby’s customers mind. And, what is NOT to like about trying to drive this whole new positioning from the bottom up with the crew memebers and management. ——————- It’s very like a line being drawn in the sand for a new beginning attitude. (And a good time of year for it coming into spring too.)

BUT, ———- you knew there would be a but - right?

Are heavy FF users really looking for a 4.99 sandwich price point? Searching for new sandwiches for 5.00 in the new normal? (That isn’t a foot long.) And, wouldn’t the marketplace of consumers that isn’t finding at FF restaurants a healthier mix - also, not going to be interested in a Three Cheese Bacon sandwich? (Will this really be pulling the women back to Arby’s from Panera Bread?)

Also, just to be picky, IF someone was in a `good mood’ - they likely wouldn’t be choosing FF - as in the new normal, fast casual seems the more likely target for the consumer. And, IF someone was having a hankering for `mood food’ - ie:comfort food - once again, FF would not be a first choice for the consumer, (think Piccadilly’s, Waffle House,). And, IF they wanted their food to put them in a `good mood’ - again, FF is simply not the first choice (think upscale upscale).

However, the bottom line to all of this is finally a positive for Arby’s, who now is a player for the 1.00 price point, combo subsituting, Angus seeking, Premium sandwich and Milkshake markets, of which it had almost no presence within until recently. Arby’s products have long had a uniqueness to them, and by joining the mainstream of where FF is going, they have helped themselves change accordingly with these new above trending positionings.

Ultimately, however, it will be a process - as Arby’s is playing catch-up largely IMO. And, 5.00 Angus sandwiches simply will not be getting the attention of most women, now a signficant portion of the FF market;  (Menu census research stuff.) nor of those who recently became users because of the 1.00 menu - those who didn’t trade down (Yikes). Because IF one were to judge who might be made most happy by Arby’s new moves - the big eater man who loves his Angus and Premium Onion Rings and Soft Drink - and who spends @ 9.00 in the process - is probably wondering why beer isn’t on the menu.

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The Angus sandwich is reviewed here - http://www.slashfood.com/2011/03/01/arbys-angus-three-cheese-and-bacon-sandwich-reviewed/?icid=main%7Chtmlws-main-w%7Cdl13%7Csec1_lnk3%7C204094 - it got a `B’. (Possible grade inflation based on review IMO.)

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Do you need market research? http://www.squidoo.com/tradeareasurveys

For example: Long John Silver’s Reels In New Logo, Message - http://www.restaurantnews.com/long-john-silvers-reels-in-new-logo-message/ – `We Speak Fish’ - Simple, direct, targeted. Compelling? And, LJS, on selling block? http://www.restaurantnews.com/yum-brands-looking-to-sell-long-john-silvers-and-aw-all-american-restaurants/

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Jack in the Box Guests Reel In $2.99 Fish Sandwich Combo Meal - http://www.restaurantnews.com/jack-in-the-box-guests-reel-in-2-99-fish-sandwich-combo-meal/ - Action price point for FF.

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Moe’s continues its interest in `weekparting’ with - Moe’s Southwest Grill Supports Meatless Mondays With Vegetarian and Flexitarian Meal Options - http://www.restaurantnews.com/moes-southwest-grill-supports-meatless-mondays-with-vegetarian-and-flexitarian-meal-options/ - Side targeting of `health’ segment.

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McDonald’s comparable global January sales up over 5% - http://www.restaurantnews.com/mcdonalds-january-global-comparable-sales-rise-5-3/ - BIG Boy comparible Down over 1% http://www.restaurantnews.com/frischs-reports-higher-sales-and-earnings-in-the-second-quarter-of-fiscal-2011/ - blames attrition to new stores! ——– O’Charley’s same store sales down - http://www.restaurantnews.com/ocharleys-inc-reports-fourth-quarter-and-fiscal-2010-results/

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Sbarro in trouble? http://www.restaurantnews.com/debt-burdened-sbarro-could-slice-some-shops/

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More soon.