Are We - Nearing The Bottom - Or - At The New Normal?
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.
