Trending Now. Value. Strategic Insights & Category Management OCTOBER 2017

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1 Trending Now OCTOBER 2017 Strategic Insights & Category Management

2 In this issue 1 Escalating price wars Apps go above and beyond Family meal deals Bottomless meals Sunday supper deals 2

3 Escalating price wars $9.21 average price of a value meal entree at a Top 500 FSR chain, down 9.6% from 2015 is increasingly important to consumers, so several major chain restaurants are doubling down on discounting in order to lure in customers and win back traffic. Meal deals that come out to $1 or less per item, in particular, are trending at limited-service restaurants. Example, Burger King recently pushed pricing limits by offering two cheeseburgers, a small fry and a small drink $3.29. In addition, three-course meals $10 at full-service chains like Applebee s and Chili s are on the up and up. Plus, mix-and-match offerings are getting a boost, as they appeal to consumers desires variety and freedom of choice. Casual-dining restaurants to continue with heavy discounting to combat steep traffic declines Quick-service restaurants to focus less on price and more on quality and convenience upgrades 3

4 Apps go above and beyond 40% of consumers say the ability to track the progress of delivery/pickup orders creates good value Restaurant apps are going beyond simple order and payment options with truly unique features to add value, as brands look to connect with diners on a deeper level. In particular, apps are focusing on specific needs of individuals. For example, some are adding options like allergen filters (Shake Shack) or next-level convenience like the ability to be remotely placed on a waitlist (Outback Steakhouse). Apps have become a key touchpoint consumers, rather than just another box to check off, and there are higher consumer expectations based on other apps they frequently use, so this will continue to trend. Virtual assistants and bots to play a bigger role in the near future Restaurant app integration with other apps like Spotify in-store music 4

5 Family meal deals Bundled family-sized meals provide easy, quick and convenient mix-and-match meal solutions. Operators are offering multiple meal sizes that feed anywhere from two to eight people. This is how operators are bridging the gap between individual takeout meals and catering. Family meal deals also play into the customization trend by allowing a variety of mix-and-match options. Plus, operators are able to insert themselves into the consideration set picnics, tailgates and large family parties. 45% of consumers say bundled family meals are likely to influence them to visit a restaurant Limited serves beyond pizza and chicken chains to jump on board, as delivery and takeout become more prevalent in this segment Innovative group beverage solutions such as boxes with spigots on top (Bojangles Famous Chicken N Biscuits) 5

6 Bottomless meals 52% of consumers say that an allyou-can-eat special would influence them to visit a restaurant -hungry consumers looking to settle in a big meal are often attracted to bottomless meal options. Chains that currently run successful bottomless meal promotions include Olive Garden (never-ending pasta and unlimited breadsticks), Bob Evans (lunchtime deals of unlimited soup, bread and salad) and Cicis (endless pizza, salad, pasta, wings and dessert buffet). For operators, the key to making sure these offerings are profitable is to menu lower-cost items that require minimal labor to prepare and/or can be prepared ahead and kept fresh. Limited or super-limited runs of bottomless meals at select chains More limited-service restaurants to hop aboard the bandwagon and offer select all-you-care-to-eat items on a limited basis 6

7 Sunday supper deals With an eye on boosting slow Sunday evening traffic, independent restaurants have been offering discounted appetizer, entree and dessert combos, along with special supper menus. These meals are positioned as a way to create new traditions or as a way to experience one last comting indulgence bee the start of the work week. Savvy chains are using Sunday suppers not only to increase traffic but also to create deeper brand connections and loyalty through the promotion of family, tradition and comt. 52% of consumers say a familyfriendly atmosphere creates good value at an LSR More chain restaurants to get in on the action of Sunday supper menus and deals Restaurants to offer prix-fixe menus or family-style servings to cut down on labor costs 7

8 Takeaways 1 Operators continue to test new ways to increase traffic and patronage at their restaurants. With the new economy and growing number of units, VALUE and pricing is one way they are driving consumers. Bundling and focus on specific dayparts is one way to entice patronage. 2 3 Technology continues to be one way to drive other elements of value to consumers TIME. The ability to check on wait times, pre-order and understand menu structure bee making the choice makes consumers lives easier and continues the desire frictionless. can be driven from several dimentions price, time, quality, experience. As chains continue to drive prices down, look a counter trend to be about the quality of the food and experience. This will be important operators to recognize and create a strategy to fulfill the need. 8