Industry News | October 29, 2008

Consumers Bite on Restaurant Promotions

According to retail research firm NPD Group, restaurant traffic is up 1 percent for the quarter thanks to discounted prices, dollar menus, and other value-added promotions.

“The most popular thing currently is the dollar menus and the discounted price offers, similar to what Subway is doing with the footlongs for $5,” says Bonnie Riggs, restaurant industry analyst at NPD.

In the quarter ending August 2008, 30 percent of all visits to quick-serves were prompted by deals. Specifically the lunch daypart benefited most. According to the group’s findings, 38 percent of all deal visits to quick-service restaurants occurred at lunch.

“If we were in different times, that probably wouldn’t be the driving force, but in this current environment, everyone is looking for the best deal,” Riggs says.

On the other hand, non-deal traffic across all restaurant categories was down 1 percent.

As a result, Riggs advises operators to run the best deal possible and then upsell customers once they’re in the store. “In the current environment, the only way operators can survive is to have a strong value-added proposition,” she says. “We’re going to see a lot more of them as we go through these challenging times.”

--Blair Chancey

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