Restaurant Trade Area Research

When I do some of my on the street - top of mind interviewing - I often ask my respondents about recall for Restaurant Advertising - here’s an example interview - http://www.youtube.com/watch?v=zTRO81RR7DA. Anyway, as I got to thinking of it just now - I thought I’d `do myself’ so to speak.

And the ad I like the most - is - Hardee’s; specifically the two `valley’ girl secretaries who are eating the `fresh’ breaded Chicken Strips and ignoring the `annoying’ phone calls they should be answering. To me, it’s hilarious and gets the message across about Freshness and upscaled.

The Wendy’s `talking couple’ ads about the new Fresh Salads (different types being featured) also comes across as promoting the Freshness and upscaled - with a bit of humor too. (The distracting relationship of the male and female Wendy’s worker.)

The Domino’s Pizza chief with his `not fluffed up’ pizza photography ads are next for me. Connects that his (Domino’s) pizza is Real Food and to not wanting to `fool the customer’ (implying the others do). The invite for consumers to send in their own pictures also connects at the personal level.

Captain D’s slogan recently - `Cookin in the Kitchen’ - caught my attention for its snappiness and food shots.

Chili’s - 5.99 Hamburgers caught my attention for low price point for sit-down casual (tipping locations) and product shot.

Steak and Shake coupons for Butter Pecan milkshakes increased my desire to go.

KFC - I’ve caught myself singing - G Double O D Goooooood - reluctantly a time or two. Catchy.

Quizno’s - 3, 4, and 5 dollar combos. Like this idea of a sliding combo price.

The laid back Zaxby’s tune - so easy to whistle.

More Top of mind Restaurant Videos Here - http://www.youtube.com/my_videos?feature=mhum

No question about this trend to having the choice of smaller portioned food items at restaurants - including FF examples of: “Boston Market’s Market Sliders sandwiches, McDonald’s Snack Wraps, Burger King’s experiment with BK Burger Shots and Jack in the Box’s Mini Sirloin Burgers” - the point is also well made in the article about price point sensitivity in the new normal. http://www.palmbeachpost.com/money/malled-restaurants-offering-small-sized-items-with-big-728206.html - more too at the article.

I love this article - Subway to Change Cheese Distribution Strategy After Web Campaign? - talk about the customer being right - again. http://www.urlesque.com/2010/06/02/subway-to-change-cheese-distribution-strategy/

‘Social Media’ Are Top Buzz Words of NRA Show - don’t forget that `social contact/media’ when greeting your customer in the restaurant or at the drive-thru window. `Friendliness’ is one of the true drivers of increased sales and increased frequency of usage. http://www.qsrmagazine.com/articles/news/story.phtml?id=10970

http://www.reuters.com/article/idUSTRE64Q42Q20100527 - Hunger for burgers overcomes economic fears - an article whose focus is the Five Guys chain and its success despite the economic landscape.

http://www.restaurantnews.com/firehouse-subs-announces-23-new-restaurants-in-salt-lake-city/ - Firehouse Subs goes wild with development in Salt Lake City.

From a bit back - Quiznos launches Operating Partner Program - http://www.fastcasual.com/article.php?id=17949&na=1&s=2 - if I am reading this right - 5,000 and you can be in the restaurant business.

Don’t leave yet - explore my sidebar for more about restaurants.

Welcome to Restaurant Trade Area Research - the restaurant blog written by a 30+ year restaurant researcher who has personally  interviewed thousands and thousands of fast food customers. (How’s that for a mouthful?) - Today’s topic, what seems to be the new need - `shooting the works’ to maintain or grow market share in the `new normal’.

Examples include:

Expanded Dayparting Focus - Subway going into the breakfast market is the first to come to mind - Daypart pricing is also notable with `2-4 pm’ reduced beverage costs (Steak & Shake — Sonic) — Weekpart Combo Specials , such as Moe’s Thursday Two for One’s - Subway’s after 5 footlong pricing, etc.

Seasonal dayparting — summers `late night positioning’ has been going on for years (open til 2Am on weekends type of stuff), and, it’s been noted recently that in the casual niche, 12AM or later, was recently claimed in the Atlanta media market by Applebee’s. At Fast Foods, `summer late nights’ is almost a requirement for some (Wendy’s, Taco Bell) but is an opportunity for others too (such as a Krystal’s potential muchie crowd,  or even sandwich niche restaurant).

Outrageous Product - The incredible focus on low price points within advertising (which has muddied the field) has made new product introductions even more important to appeal to the `trier-rejecters’/aware non-users of any fast food brand. One method to get attention is the outrageous product - such as KFC’s Double Chicken Sandwich. And, most recently Burger King’s move into Bone-In Ribs - would be an `unexpected’ example of a `new product’ that should `create new trial’ - especially with good word of mouth - especially during summer. (Perfect `season’ new product introduction.)

Expand Competition Into Other Niches - Recent examples of this include McDonald’s continued focus on beverages such as premium coffee and other choices. Burger Kings new Ribs carves out part of the sit-down market (and the `upscale’ `trade down’) as does it’s Brunch positioning in some markets. The new `upscale’ Milkshakes by Chic-Fil-A, Hardee’s and Zaxby’s –> reach into the `Dairy Queen’/Baskin Robbins niche.

The `Health’ Market - Long heralded as the next sure thing (only problem was that in the 80’s-90’s market was still non-existent) , the `Healthy Fast Food’ market may finally be available - due in large to the already established `Bakery’ niche being taken ALREADY by the female demographic that has turned FROM fast food choices in the last 8 years or so, - to places like Panera Bread or Atlanta Bread Company or others. To me, it seems the natural ones to attack this would be sandwich chains like Quizno’s - Blimpie’s - Subway.

Upgraded Products/Serving Quality - Angus Beef now is an example of offering the `upgraded product at a premium price’ niche. Obviously it also attacks the `fast casual’ growing segment (the stepdown from casual tipping establishments). I’ve already mentioned BK’s Ribs. KFC roasted chicken could be seen by some as an upgrade in health perception.

Selling Branded Products — To me, it is a little self-defeating - BUT - White Castle has frozen product as do many other restaurant chains. To me, I’ve never found these pre-packaged foods to be as appetizing. How about you? Then again, Dunkin Donuts coffee seems logical - and I know that I’d buy a Big Mac Sauce if it was ever offered.

Fancy, Social, E-Mail Marketing Database Building - To me,  working with a stores known customer bases information - and the customer base itself - is VERY attractive too - and is needed to not lose an edge to the competition. That said, some areas seem to have the potential to eventually become overdone and self-defeating (the free food promotion costs - or extreme motivational discounts) and eventually will have it’s `day-come’ due to overuse.

For example, lets say you sign up with a store chain that will provide you a coupon code every time you go to their restaurant trade area — if you signed up with multiple chains you eventually would not wade thru the offerings and IF you did act on one - it would be the one `giving the most savings’. Coupon people are indeed driven by costs - which will drive down your profits and establish a two-tier payment pricing - and confuse the customer base about the real price/value of your products. GPS `coupons’ will not replace friendly smiles, eye contact and good operations. (Within this blog I’ve talked about specific marketing that can be done with your EXISTING customer base via ONE question frequency targeting - or - NO question `menu’- total purchase targeting.)

The `New Marketing’ for the `New Normal’ goes way beyond buying the 25-54 demo slightly focused on one sex - and expecting success. No, the new normal demands running on all cylinders in multiple directions - and catering to a stores unique customer base.

Thanks for reading today - if you check out my sidebar - you may find a category of interest to you. You can also read more about my MarketView research at www.squidoo.com/tradeareasurveys .

Putting promotion and advertising dollars behind various price points is nothing new in the restaurant category - but - in 2010 - it would seem to be of huge importance based on the current crop of ad positionings positioning prices. For example - check out this list of price points promoted in the past year in the Atlanta ADI at least:

79 cents - Taco Bell (occasionally).

99cents - Wendy’s Value Menu - Capt. D’s sides

1.00 - McDonald’s Dollar Menu; Burger King, Arby’s, Checkers

1.50 (2/3.00) - Checkers, Dairy Queen (occasionally)

1.99 - Snack meals - Mrs. Winners, Church’s, KFC (occasionally), Dunkin Donuts, 

2.00 Denny’s

2.50 Subway Breakfast Combo

Meals For One

2.99 Combo’s - McDonald’s, Wendy’s, Krystal, Boston Market

3.99 Long John Silvers, KFC, (4.00)Firehouse Subs >4Pm (4.00) Steak & Shake, (4.00) Quizno’s, 3.99 Hardee’s, (4.00) Denny’s

5.00 - Subway Footlong, Boston Market 5.oo + sides, (5.01) Arby’s, (4.99) Waffle House, (4.99) CiCi’s Pizza, (5.00) Little Ceasar Pizza, (4.99) Denny’s, 5.00 - Capt. D’s lunch, (4.99) - Zaxby’s,

5.99 Domino’s Pizza, 6.00-Denny’s

8.00 Denny’s

6.99-9.99 - Friday’s, Ruby Tuesday’s, Ryan’s, Golden Corral, (10.00) Pizza Hut, Folks Restaurant, Red Lobster, Olive Garden, Applebees,

And now, with smaller portions becoming more accepted at a reduced price (often with more profit however) - the under 10.00 to eat AT a restaurant perception continues to grow.

Quiznos Carves Out Broader Niche - http://online.wsj.com/article/SB10001424052748704089904575093520021777354.html Sandwich Chain to Expand Locations at Convenience Stores and Filling Stations - Smart move IMO.

http://www.shorpy.com/node/7841?size=_original - Ask Us About Our Poultry: 1942 - Times have changed a bit.

BK Franchisee Speaks Out - …Owner of 312 Burger Kings says the company is paying a steep price for “extreme affordability.” http://www.qsrmagazine.com/articles/exclusives/0310/burgerking-1.phtml - The price price price mantra.

Restaurant Performance Index Declines Slightly in January, but Optimism for Future Business Conditions Strengthens - http://restaurantnews.com/restaurant-performance-index-declines-slightly-in-january-but-optimism-for-future-business-conditions-strengthens/ Please, remember the same BS happened last year.

Bans, Taxes Seen as Effective Against Junk Food - http://www.aolnews.com/health/article/bans-taxes-seen-as-effective-weapons-against-junk-food/19389723 A 5.2 percent tax on soft drinks, already levied in several states, reduces consumption only enough to shave three ounces from a 279-pound frame, Always be on the watch for our worthless politicians.

Finally, I recently had a contact wanting to find out user information for a chain that I was very familiar with - thinking, evidently, that information is similar in different markets. (HUH?) — I hope that is not what YOU think?

BTW - spring is a great time for the MarketView - find out more about my service at www.squidoo.com/tradeareasurveys or - 678-467-8650 and ask for Rick or leave a message.

One of the few available ways to increase sales is to increase the size of the eating party - here (perhaps you have seen the ads featuring Bo Bice) Moe’s smartly does just that. Indeed, by targeting a `workday’ Moe’s is even encouraging the development of the `office workers luncheon `date” (no romance required). And, by establishing work pairs eating out together - it will surely `happen’ on non-2-1 days too. Excellent idea.

More links to - including:

Vowel Sounds Influence Consumers’ Price Perceptions - http://www.cnbc.com/id/34919366 

10 Worst Sandwiches in America - http://health.yahoo.com/experts/eatthis/43781/10-worst-sandwiches-in-america/ - A list you don’t want to be on - such as FF chains - Arby’s, Panera, Red Robin, Subway, Blimpie, Quizno’s.

Unemployment Takes a Bite Out of Breakfast - http://www.aolnews.com/money/article/unemployment-takes-a-bite-out-of-breakfast/19367237 - Down 4% — even 8% off breakfast sandwiches at 7-11.

http://www.slashfood.com/2010/02/23/burger-king-unveils-secret-weapon-for-new-steakhouse-xt-burger/ BK goes huge. 7 oz Burger - new broilers.

http://restaurantnews.com/short-orders-news-bites-from-across-the-web-022510/ Just showing off that last weeks post was carried by restaurantnews.com - cool.

Hungry for Returns? Try Wendy’s/Arby’s Group - http://seekingalpha.com/article/185953-hungry-for-returns-try-wendy-s-arby-s-group

Return soon for more.

Just a short one today. So, I see a TV ad for Checkers advertising their new fried chicken wings and an enticing - get 3 free wings - (giveaway date I believe was last Wednesday) on a selected day. So, being a lover of wings and thinking that this might be a good brand extension for Checkers - I make a mental note to check it out with my daughter.

So, on selected day - we travel into the main Woodstock Ga. fast food strip to Checkers about 4:30 PM — and indeed - see on the reader board for the unit — FREE WINGS today. So, excitedly we get in the `inside line’ - the one where the passenger (me) will be dealing with the food. No one is even at Checkers in either line.

We immediately see on the orderboard that there are varieties of wings - and are again - excited. And, then - we wait. And wait. And wait. Even while no car is in line that we can see (they could have been waitng on a car in the other lane at the window).  Indeed, as we wait, another car has now pulled into the `other’ outside lane. And we hear their orderspeaker go off - followed moments later - by ours saying “you will need to get into the other line”.

So, bummed out - having been there at least 3 minutes - we back up and maneuver (first bait and switch) into the other lane — to be quickly pinned in from behind by another car.  Yikes.  But, about a minute later, we pull up and are greeted with `do you want to try our wings today’ - yes, we call out. We explain that we have two folks in the car and can we get 6 FREE wings.

To that, we are told - “to get FREE wings you have to make a purchase” and also that for 6 wings we would need to purchase TWO items - and that - oh yeah, only 1 of the 5 varieties was available for FREE.

Now, we were really trapped - the car that had pulled ahead was still waiting for food and looking into the rear I could see the other car behind us. BUT, the car behind us, evidently, heard our conversation (about having to make purchases for the free samples) and was beginning to back up and out of the parking lot-  even before we decided what to do.

Now having a choice to leave made our decision easy - so,  we said - with anger — `forget it - that is not free’ - and backed out of the unit ourselves.

I doubt we will return for wings.

(This reminds me of Quizno’s screwed up giveaway only months ago.)

Make sure to keep reading down the page for more posts.

As far as the Woodstock Georgia fast food market is concerned  - restaurants continue to be under competitive pressures with strong discounting and `new and interesting’ promotions to offset the continued shrinking of customer bases. Indeed, just recently, ABC - the Atlanta Bread Company in Woodstock had a Sunday evening `Murder theater’ (with actors of course) near closing time for which tickets at 10.00 per head were sold. These `patrons’ would have an additional chance to purchase food and dessert from the unit too - for enjoyment when watching the play.

And, the discounting continues at all levels from Waffle Houses 4.99 meals, to 4.00 KFC meals, to 99 cent Dunkin Donut specials, to the buck level at Checkers, Wendy’s and — whatever special Arby’s has going at a various promotion period. In the nearby Sandy Plains/Shallowford area the Boston Market was doing bounce back coupons for buy one meal - get one meal —— that’s up to a 6.99 value — (and one our family took advantage of) and up to 50% off. And, within the past month, Arby’s was giving the `RoastBurger’ away with the purchase of a drink (& Quizno’s also gave away it’s small sandwich.)

Couple all this with promotions from the last posting - many of which are still going on in one form or another (including daypart pricing) - and you have a very sensitive price market the likes of which haven’t been seen in a long long time, if ever. Increasingly, `eating out’ is positioned by the media as the one way that Americans are cutting back and saving money. And, again increasingly, the eating out `habit’ is being broken at some level.

Indeed, the extreme multi times a week users (4+ times a week)  - while usually not  a huge element in most fast foods - is largely gone - as these hardest regulars have become part of the once a week users - generally. And, while most of the two times a week or once a week users have hung on in most circumstances - especially in white collar, lunch oriented restaurants - those users are probably most reduced in the evening timeframes.

Probably most affected frequency wise in customer bases are the occasional once a month type users - who have often fallen into the `never use anymore’ or seldom use category - as consumers tighten up into their most favorite choices. NEW customers, once a mainstay at 3-8% of all fast food customers is again - almost nil. (Why waste precious money on places without a proven track record?)

So, with all this - with restaurants of all kinds closing (which does help others who survive in degrees) - with frequency rates dropping - with price pressures at every turn - the question must be asked if this is the bottom to be endured - or - a new normal? (No one wants to think it could be worse - and indeed - as competition closes - the `replacement effect’ of the `new meal occasions’ to be filled in the local market - will modify - to a degree - further downturns.)

Indeed, if the downturn continues for much longer - say - another year (an overly negative view compared to consensus) - we could see some companies go to a more innovative way of pricing their food products. Perhaps combos will once again reflect a real `savings’ as opposed to an easy way to order in a few words. Perhaps we will see the drive thru priced in a different manner - compared to inside customers. Perhaps drinks will become cheaper at the drive-thru (as no re-fills occur).

Indeed, perhaps we will see `customer loyalty’ cards be set at effective levels - buy two combos get one free - for example —- as opposed to cards that required too many uses to motivate a customer base. Or, even `in-store’ contests to motivate the bigger instore spender - or - targeting the very largest purchasers (only) with a `discount’ on that next purchase (setting the level at transactions in the highest 5% total) - showing recognition of these remaining `special’ customers.

Because, as Dylan said, the times,  they are a changin - and, previous practices and marketing approaches - especially if they all sound the same - may have little useful effect. It may take new approaches and new ideas of consumerism to survive to the other side of the downturn - and - it’s not too early to begin to consider such ideas.

Hello, welcome back to the Restaurant Trade Area Research (RTAR) blog - thanks for stopping for a read. And, as you can see by the title of this post — once again in our depressed economy - where the discretionary dollar is scarce - where one restaurant unit after another closes - price points remain criteria number one for most restaurant chains.

Locally in northern Georgia - Mcdonald’s and Steak and Shake have met the Sonic reduced drink prices in the afternoon - Checkers has finally positioned a dollar menu — and as mentioned before Quizno’s `reduced prices’. And, two more restaurants have bitten the dust in the Woodstock Ga. market - Sonny’s BBQ (unbelievably) and the Woodstock Restaurant (daily buffet) - bringing nearly half a dozen closed up restaurants to Woodstock HWY 92 in the last few years.

But, it doesn’t end there - as the casual sit-downs are firing back on the price front with TGIF’s offering a buy one get one — with that being matched by other competitors like O’Charlies. And:

1-Wendy’s —- 3conmics (99cent choices) 2. Free Pancakes at IHOP tomorrow 3. Denny’s recent free grand slam breakfast 4. Steak and Shake’s recent `free combo’s for a year’ giveaway at local Atlanta locations 5. Fazoli’s - BOGO (buy one - get one) 6. Dunkin Donuts 1.99 breakfast combo 7. Starbucks - Breakfast value meal 3.95 — 8. McDonald’s Specials (like 3.33 for a Big Mac Combo) 9. Ruby Tuesday’s combo’s at 5.99 — Likewise Hooters 5.99

Makes one wonder when some chain will be bold enough in the south to make sweet tea a different price 24 hours a day - like 59 cents with any other purchase.

Finally, seems the burger front may be heating up - first Burger King’s mini’s will put pressure on Krystal’s and Roast Burgers at Arby’s - should compel trial. 

Hello, thanks for returning to my Restaurant Trade Area Research (RTAR) website - I’m back and ready to comment on the utterly new marketing situation all businesses are facing during this economic downturn. This blog decided to `wait’ during the last 10 weeks - rather than comment `daily’ on the possibility of financial meltdown and market disruptions. Knowing that you, a franchisee - knew the real business situation better than the commentators on Tv or in-print.

But, seeing now that 10 weeks after the end of the first cash crisis, that we seem to be facing, again, the solvency of the very banking system — it at least seems prudent to update the on-going strategies being employed with marketing and ad dollars - by various fast food, casual, and sit-down restaurants in 2009 – and that strategy - not surprisingly — has one focus — PRICE. (Ad language for `cost’ — the perception of the consumer.)

As you may know, when we left off in Nov. it was about price too - various price points - and now - we have the same only ratcheted up a degree. I can only comment about the local Atlanta media marketing and local store market close to Woodstock, Ga. That said, I’m pretty sure that each is generally reflective of the nation as a whole.

Perhaps most noteworthy and of immediate concern to the competitive marketplace is Quiznos advertising campaign about `reducing prices’ on food. Period. Not, come in for a reduced price combo or similar deal or bounceback coupon value — no - the actual phrase positioning `reducing prices’. Their local couponing has a 2.00 off any regular sub and buy any sub and get a chips and regular drink FREE. Combine the everyday reduced prices with an additional 2.00 coupon — and the price for loyalty and new trial customers - has just been increased.

And, as you know, - for years - Sonic - has offered reduced drink prices during the afternoon. And, as you know, since Chick-Fil-A  (and Hardee’s) started selling quality milkshakes - those that previously sold shakes (especially Dairy Queen and Steak and Shake) - have probably been under some pressure on a signature item. The response - an aggressive coupon campaign by Steak and Shake and not only that, locally, in Woodstock, Ga at least — reduced price shakes from 2-4 in the afternoon. A very good aggressive response and making true dayparting of pricing a strategy that deserves a second look. (Such as reduced coffee pricing after 4 PM.) Not only that, recently, Steak and Shake had a special of those small burgers that are now favorites of Casual Restaurants too - attack on all fronts.

Fortunately, the above examples are the only ones talking about reducing prices (although - O’Charlies has pushed the casual market with the 7.99 price point advertising - instead of the usual 9.99) and, ultimately,  your customer ticket total. But, all the others are doing the same in their own manner. Here’s just a re-cap:

McDonalds - To soften the price INCREASE for the double cheeseburger from the old price of 99cents to 1.19 - the `old’ price of the double cheeseburger Combo for 2.99 is retained. (Only those cheapies will face that 20 cent increase.)

Wendy’s - Pure price positioning - 3conomics — with the focus on 99 cent choices of only Wendy’s quality and variety. (McDonald’s has countered with ads supporting their  3 - 2.99 combos too.)

Arby’s - From 1.99 Chicken Sandwich choices to 3.99 specific combo choices — low price positionings for Arby’s.

Taco Bell — Ads geared to products BELOW 99 cents each.

Checkers - New `99cent’ offerings.

IHOP - All you can eat pancakes.

Zaxby’s - 5.25 (or about) Combo’s.

About the only ones holding to a non price strategy at the moment are the potentially `low  priced’ Krystal (hard to reduce the price on a burger of that size) and `high quality’ brands - such as Chick-Fil-A. And, Burger King - continues to do what the King does best - be edgy.

The RTAR will get back to regular postings, with weekly links, with more opinions, and more updating  of the sidebar (and more) for this webpage - hope you like the changes to come in 2009. I want to suggest looking at the full 2008 postings of merit by  hitting the link in my sidebar review of 2008.

Continue down the page for much more. See you next week.