Here we are at the beginning of a new year and a fresh wave of foodservice trend predictions. There’s one I read that I don’t see happening. I refer to the trend prediction that restaurants will return to normal pricing in 2025, per a Nation’s Restaurant News Dec.24 article.
Here’s a perfect example of the popular saying, “If we learn anything from history, it’s that we don’t learn from history.”
We’re in another cycle of economic woes for consumers and operators alike, with consumers looking for value, and operators’ only recourse is to offer value menus, bundles and deals in order to draw traffic and sales while trying not to compromise margins. Once one operator resorts to cheap offerings, so does its competition—until the bulk of operators offer consumers a smorgasbord of cheap choices, and “the race to the bottom” begins. We went through this before. Think 2008 economic recession. I followed that closely, and I saw how hard it was for operators to bring their prices back to normal.
As McDonald’s unfurls its new value platform, McValueTM, in restaurants across the country, do you think Burger King is going to give up its “$5 Your Way” meal deal? It’s even getting cutthroat out there with casual dining eatery Chili’s offering a “3 for Me Deal” starting at $10.99 to shamelessly draw business away from quick serves.
Back in the day, I doubted the industry could pull itself out of the meal-deal conundrums, but it seemed to do it. And now we’re back into the thick of it.
We’ve already seen that dynamic pricing with its automated data-based pricing changes is not the solution. Too much consumer backlash.
I’m not sure that with inflation and increased food costs the industry can really afford to go too deep back into value meals.
Some experts suggest appealing to other values beyond price. I’m guessing they are referring to ethical or sustainability values like no-antibiotics-ever chicken, organic, cage free, free range, fed 100% vegetarian diet, raised in the USA, etc. There are plenty of surveys out there that say consumers would buy and pay more for food that complies with these ideals. But I’m going to guess that come lunch or dinner time, hard-pressed consumers are going to scrap the ethical values and look for something cheap.
One solution more easily leveraged today than in 2008 is the use of loyalty programs. By tying promotions and deals to loyal, purchase-tracked customers, you not only reward repeat business but also gain the ability to tailor offers to their preferences. This approach creates opportunities to upsell and drive incremental sales while keeping discounts focused on those who already value your brand. Why hand out $5 meal deals to everyone when you can reserve them for your regulars, ensuring your efforts directly reinforce customer loyalty? It’s a smarter, more targeted strategy that helps protect your bottom line.
Jody Shee
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