Restaurant Trade Area Research

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In my last post http://restauranttradearearesearch.com/2010/04/21/price-point-stalking-the-new-normal/ - where I provided a list of price positionings that I’ve seen various restaurant chains promote in the past year in the Atlanta ADI - I made the point (I hope) of `how crowded’ some price points are. (AND PROBABLY HOW HARD IT IS TO STAND OUT AND CLAIM A PRICE POINT).

That said, the chains are doing it for a reason - price talks in this new normal. The minimum price to have the chains `experience’ - whether it’s 79 cents at Taco Bell, a Buck at Arby’s, 1.99 Breakfast combo at Dunkin Donuts, 2.50 Subway breakfast combo, 2.99 Boston Market 4.99 Pickadilly’s (who I forgot to include) …ect. ect. ect. — is gobbling up significant portions of marketing efforts and probably not contributing significantly to the bottom line of operating revenue. It can also make the `regular priced fare’ appear to be much more expensive in  a perceptual sense. (Also, unless you are Taco Bell, someone will ALWAYS be cheaper - why pay more?.)

All that said, appealing to multiple price points - including the one that seemingly IS affordable (the minimum prices) - may continue to be important strategic positioning until a real recovery begins - if and when. BUT, now that these minimums are already in place, some shift in ad revenue should happen to emphasize other important restaurant and FF restaurant attributes. (Fun, quickness, food quality, etc.)

Thanks for visiting today - I offer the MarketView, read about it here - www.squidoo.com/tradeareasurveys .

First, let it be said that my usage of nearly ALL of the restaurants has already assumed the `new normal’ of the Great Recession. Regardless of what cheerleading the media may be doing about the economy - most folks are now cautious on discretionary spending - of which, restaurant visits - even to a degree Fast Food restaurant visits - has been impacted. 

 In alphabetical order:

Arby’s - I `responded’ to the ads for the `Roast Burger’ earlier in the year and was not impressed. I refused to respond to the Marry a Goat `humor’  ad campaign and somewhat like the recent 5.01 combo or pricing (the one cent being for Quality).  That said, generally, I perceive that Arby’s as expensive without having coupons from the coupon mail drop a few times a year. Additionally, they  `streamlined’ their `fries’ - dropping my favorite the Homestyle. How can they NOT promote the Jamoca Shake?

Atlanta Bread Company (ABC) - Remodeled nicely. Upgraded to real plates and silverware. Messy to clean up. Can be crowded and slow service. Female favorite. Good soups and combo prices. Mellow atmosphere.

Burger Inn - Local  legend - all fresh cooked. Great breakfast customer base. Friendly people; newspapers available often. Excellent onion rings. Beefy hamburgers. Male favorite.

Burger King - I like the current billboard promotion about the Double Cheeseburger for a buck, real value - but - haven’t gotten it.  I have ordered the Mini burgers more than once however and view that as an excellent addition. Amazingly, the Woodstock BK got rid of Real Sweet Tea years ago (my assumption is that is still the case) and thereby nearly ended my usage — I can’t stand the fake sweet tea out of a machine. Operations should be aware that changing ICONic drinks can have a big effect. — Finally, where is the KING?

Capt. D’s - Perhaps my favorite FF in Woodstock. Quality, Quick, and Quantity with good value pricing. Covers all reasonable price points including lunch specials and on-going `specialities’ that have all prices. Excellent choice of sides. Funny ads earlier in the year comparing to Red Lobster pricing. Friendly greeting and thanking when exiting. Good inside music.

Checkers - Still a viable concept (double drive thru) - chicken wings were a good addition earlier in year - somehow it fits. Catchy phrase “you gotta eat” recognizable for smaller chain levels of advertising. Covers all price points well with a good mix of products. The Woodstock store does Sunday Pricing - good idea - hasn’t ever motivated me for their `down sized’ versions. Could probably `play-up’ the FUN theme a little bit more.

Chick-Fil-A - Woodstock’s Chick-Fil-A is amazingly busy. Overwhelmingly busy whenever they do a promotion like 2-1 for a chicken sandwich or free food giveaway. Excellent quick service regardless of how long the lines are - especially at the drive-thru. (However, I’ve detected a time or two a usage of `workers in India’ taking my orders — I’m not kidding - and, in this time of underemployment in America - that is NOT right to save a few cents that way.) Real Milk Shakes were genius. Consistent quality. Friendly employees. Clean. ————— All that said, the Woodstock inside service in the sit-down area can be horrid and when is Chick-Fil-A gonna get some normal fries? Also, one takes a chance when getting the baked potato.

Dairy Queen -  The standard in Ice Cream desserts from the drive-thru. Haven’t used but really like the new pricing structure in ads 2/3 3/4 4/5.00 - interesting approach. Unfortunately, for me, the food hasn’t broke thru.

Dunkin Donuts - Right on the Strip - I’ve never used location. Certainly they can advertise donuts and donut prices more.  (IF I knew a quick Donut sweet was 99 cents for example - it would come to mind for `dessert’ or breakfast purchase more often. Never seen a place less concerned with establishing a price point understanding. Just how much does a dozen donuts cost?)

Firehouse Subs - Expensive but Excellent. Can be slow. Friendly employees. TV’s to watch. Good real sweet tea. Small, can be crowded.

Five Guys Hamburgers - Tangential to Woodstock in Sandy Plains area — good operation - waiting for a Woodstock Location (several good places available perhaps too).

IHOP - Expensive, right? What specials?

KFC - Closed but not forgotten. Also was one, like BK, to drop sweet tea for a time.

Krystal’s - Krystal `fix’ a must a few times a year. (Canton Road.) Ad’s featuring Crispy Onions on burger looks very compelling. Wi-Fi add - good idea.

McDonald’s - Woodstocks unit re-designs and updates the interiour often - which is nice. Clean. Service can range from excellent to very poor (weekends). Can often find an AJC or USA today in newspaper bin. Separate kids area - thumbs up. Fries can vary in quality. Best FF fish sandwich.

New China Buffet - Lunch value leader. Good quality food. Friendly employees. Priced by the pound to go. Widest variety of food.

O’Charlies - Stopped going shortly after changed menu restricting Prime Rib to Sundays only.

Panda Express - Have never used. Pass by back of lot 3 times a week on way to Walmart.

Po Folks - AKA Folks —> Expesive for what you get.

Ruby Tuesday’s — How could they get rid of German Potato Salad? (pet peeve). Good miniburgers and platter pricing. Easy to split orders. Great salad bar still.

Sonic - I really like their ad’s inside the car with the main guy and his friend and the main guy and his wife. Classic. Best onion rings in Woodstock at FF. To me, tasteless burgers. Fun to use. Daypart pricing on drinks in the afternoon. Fun music playing.

Steak And Shake -  Best Milkshake in Woodstock. Can be very expensive without coupons and very reasonable with coupons. Great variety of sides. Great music inside.

Subway - Good with pricing with coupons. Good quality. Can be SLOW service. GOOD real sweet tea. Fresh. Daily specials a good way to address pricing. Excellent variety of sandwiches.

Taco Bell - Good cheap price positioning. Good Chalupa’s. Good real sweet tea. Good service speed. Good quality overall.

Wendy’s - Huge variety in quality - excellent one time - poorish the next. What the heck happened to the fries - almost tasteless compared to yesteryear. I’m told good salads. Expensiveish compared to McD’s. Baked potato good price/quality.

Thanks for reading - feel free to comment.

Here’s some links also:

KFC Closes Its Doors to Fight Hunger - http://www.slashfood.com/2009/09/30/kfc-closes-its-doors-to-fight-hunger/?icid=main|htmlws-main|dl5|link6|http%3A%2F%2Fwww.slashfood.com%2F2009%2F09%2F30%2Fkfc-closes-its-doors-to-fight-hunger%2F Community involvemet matters - look at the results of the survey on this page too.

A Real Whopper? NASCAR’s Stewart to take live polygraph test in ad  - http://www.walletpop.com/blog/2009/09/30/a-real-whopper-nascars-stewart-to-take-live-polygraph-test-in//?icid=main|htmlws-main|dl1|link5|http%3A%2F%2Fwww.walletpop.com%2Fblog%2F2009%2F09%2F30%2Fa-real-whopper-nascars-stewart-to-take-live-polygraph-test-in%2F%2F BK, attention grabber again.

Eat, drink, and spend money: Restaurants ply diners with cheap booze - http://www.dailyfinance.com/2009/09/29/eat-drink-and-spend-money-restaurants-ply-diners-with-cheap-b/#continued?icid=main|htmlws-main|dl3|link3|http%3A%2F%2Fwww.dailyfinance.com%2F2009%2F09%2F29%2Feat-drink-and-spend-money-restaurants-ply-diners-with-cheap-b%2F%23continued

In my decades of doing Trade Area Research, specializing in `attrition estimates’, — I’ve often done projects that involved market expansion considering new store locations that involved one franchisee vs another. Usually, these project originated with companies in which I was the National Supplier of this service (two national fast food chains) but occasionally not (being known by different franchisee’s in the same market who hired me as an arbitrator/fact finder).

Most national fast food brands have a policy concerning `trade area infringment’ - with the establishment of `what level of attrition’ is `acceptable’ with new store development (those `acceptable’ dollars leaving YOUR pocket and bottom line). And, most fast food brands have a policy of `who pays’ for such research too. Want to find out that type of info? — Then send me an e-mail at southernsurveys@aol.com - describe your situation and I will tell you more specifics (please include a contact phone number).

Today’s Restaurant Links

Brown Bagging at Lunch Hurting Restaurant Sales

http://www.qsrmagazine.com/articles/news/story.phtml?id=6996 —A fantastic, research supported, four minute read with many insights - but, perhaps an exaggerated title about brown baggers as the `increase’ is barely measurable (35 increasing to 38 times (a year?)) and is probably within the range of `plus or minus’ for the two compared surveys. Here’s a quote from the article :

“There are a number of factors adversely affecting the mid-day meal business at restaurants, and brown-bagging is one of them,” says Harry Balzer, vice president, The NPD Group, and author of Eating Patterns in America. “Certainly the economy, growing unemployment, the erosion of disposable personal income, slow-down in number of women entering the workforce, and more telecommuting options are also influencing consumers’ lunchtime behaviors

Frankly, to me, the decrease of sales is likely the erosion of disposable income and telecommuting - brown bagging is the result as opposed to a cause. Indeed, for consumers living in under-penetrated fast food markets (one FF several miles away) the increase in GAS prices is probably a factor too. After all, the 3.99 combo is REALLY 5.99 if the roundtrip is 10 miles and you get 20 miles a gallon.

The reality of smaller trade areas is increasing - and - not just because of the gas price — I will talk more about that in future posts.

KFC’s Vegetarian Sandwich - Isn’t

http://consumerist.com/5027777/kfcs-vegetarian-sandwich-isnt-stop-kidding-yourself-that-fast-food-restaurants-have-vegetarian-options  I almost had to laugh at this article due to the HARD vegetarian position. Indeed, make sure to read the comments as they are most insightful.

Drive-Thru Reseach Study 2007

http://www.qsrmagazine.com/reports/drive-thru_time_study/  This is a MUST read about how different fast food brands are dealing with Drive-thru business - vital, of course, to nearly all FF and the bottom line. This is not a short read but worth it. Here’s a sample table:

Having done scores and scores of projects in fast food restaurants over decades - I’ve often advised clients to do `operation ratings’ on our questionnaires. This might involve asking respondents (your customers) to rate things like speed of service, cleanliness of the unit, value for the money and so forth. But, the one attribute that when `crossed’ with frequency of usage that stands out is `friendliness of the employees’.

It seems that in this day and age - despite being told by the media we are off in our own world and don’t want to be bothered - that customers react to friendliness MOST. Since the person who interacts with the customer is the main person to project this image — it is imperative to make sure that person has a friendly engaging voice (at the drive thru speaker) and in-person on the cash register - that the person is one of your BEST employees for eye contact and smiling. (Again, a good clear voice is needed).

In future posts, I’ll tell you specific figures for how often a customer uses a restaurant when they rate friendliness an 8 rather than a 10 — once you know, you will act quickly. Don’t wait - do it today.

Today’s Links

NYC Chains Have to Post Calorie Counts

http://www.bloggernews.net/116809   Yep, right next to the product on the menu, in the same font, must be the calorie count. Logic would suggest that some shift in food orders will be the result of such laws. It would also suggest some erosion of usage perhaps by less committed users of your brand.

Calorie Counts on Menu Boards

http://www.chattershmatter.com/2008/07/20/nyc-fast-food-chains-add-calory-counts-to-menu-boards/  Same story, slightly different slant.

Law to Restrict Location of Fast Food Restaurants in LA

http://thepacker.com/icms/_dtaa2/content/wrapper.asp?alink=2008-16452-821.asp&stype=produceconcepts&fb= In South-Central LA - to improve health of youth. Here the hope is that by restricting Fast Food Brands that `other healthier’ choices will open shop.

Based on today’s links - Government involvement in FF seems just another example of our BIG government.

Hello store owners and corporate restaurant folk - welcome to the Saturday edition of Restaurant Trade Area Research - the restaurant blog of Rick Phillips  - a market researcher with over three decades of real fast food customer research at the street level (in the stores).

Today’s topic - drive thru operations. —- Over the years, many attributes have been associated with drivers/customers experiences while waiting to purchase your product without leaving their comfort cage (the car). But only one attribute will almost immediately turn away a customer if they have any alternatives for food - the long line before the speaker. Only with previous good experiences with the restaurant at the drive thru (with long lines), will maintain the customer in line for today.

With the drive thru often contributing over 50% in sales - this is not a lecture on the need for speed. And, indeed, many issues related to drive-thru’s will be explored in future postings. So, what this post is imploring in all operators minds is the new reality of 4.00 gas - to the point that the operator realizes that `while idling’ the customer is probably having this thought `what a waste’ (of money, more than time).

Marginal customers to the fast food customer base may be weakened more than usual by drive thru delays - especially those in SUV’s (if you get what I mean). So, this is more a time than ever to get your best crew on the window - don’t idle your drive-thru traffic away.

Now, onto today’s links.

Today’s Restaurant links (July 12th 2008)

Second Q Wendy’s Sales Up

Link - http://www.bizjournals.com/wichita/stories/2008/07/07/daily32.html

Up over 1% at franchisee locations - up at company stores too - after a down first Q.      RTAR - rating - 8 - Being from Ohio many years ago; yeah for Wendy’s. Perhaps the `choice’ of sides attribute helps.

Ruby Tuesday’s Same Store Sales Off for 4th Q

Down over 5% at both company and franchised units this Q. That said, many indicators look good according to the two minute article with quotes from the founder. >>>>>>>>>> RTAR  rating - 5 - No one likes sales to fall significantly at a signature national restaurant (could it be those who loved the German Potato Salad?) - that said, much is sited in the article of importance including the satisfaction scores. So; is it a shrinking total trade area? (Trade area research on stores with prior existing studies done at the store level reveals this information. Indeed, this is the exact information I’ve given to clients on repeats within their markets.) Or, just the competitiveness for the discretionary dollar?

Green Fast Food - Really Here or a Green Dream

Link: http://www.socialfunds.com/news/article.cgi/2529.html  This article is about a 4 minute read. It rehashs alot of the grist of what the environmenalists want out of companies and fast food restaurants inparticular. Styrofoam is the big meanie. However, several hundred have committed to a more aggressive program - this could be for you if you live in a highly committed `green community’ and could aid store usage by limited few - hippy, yuppie, and student oriented trade areas come to mind.     >>>>>>>> RTAR rating - 6 - Just make sure you aren’t the LAST to do this if you are in one of the above stated communities. But, wait, do `environmentalists’ comprise a worthwhile worry or significant market for FF restaurants - not yet. Lastly, however, remember the Karma factor.