Casual Dining's value pricing dilemma and how to regain momentum

Posted by Maeve Webster, Senior Director, Datassential June 24, 2013

Tagged in Foodservice Industry Research Foodservice Operators Industry Research Optimize

Maeve Webster HeadshotMaeve Webster, a senior director at Datassential, is a lead consultant for foodservice manufacturers, operators, and distributors. She has spearheaded more than 300 major industry studies during her 12 years as a foodservice specialist, and today designs and manages both consumer and operator-based studies in Datassential's strategic research group.

 

When the recession hit at the end of 2007 and customers opted to scale back their dining spending, all industry segments were forced to switch marketing gears in an attempt to lure newly-frugal patrons into their restaurants. QSRs typically focused on cost-based marketing, while Fast Casual created value-based combos or bundles that emphasized quality, freshness, seasonality, health, and unique offerings.

Casual Dining, long known as the leader in these qualities, opted to take the QSR approach and focused on price. Many casual chains added prix-fixe menus at lower price points or advertised price-driven menu items. As dinner traffic slowed and the average check dropped, low-priced lunch specials were added in order to entice customers away from Fast Casual.

Which segment has benefitted? As Datassential has tracked the progress of each, it has become apparent that Fast Casual is winning the battle for dining dollars. In particular, Fast Casual has effectively made the case that it offers the best of both worlds to consumers. Fast casual chains are able to offer the lower prices of QSRs, while providing the high quality and unique ingredients of Casual Dining.

We also look at the ways foodservice manufacturers are primed to help, including the existing knowledge areas that foodservice manufacturers can leverage to support operators... And, by focusing on quality-based values instead of cost, Fast Casual has created a more sustainable model for long-term growth. As the economy recovers, both QSRs and Casual Dining are finding it difficult to raise prices and increase the average check.

So what can Casual Dining do to reverse the trend and regain momentum? Our research has uncovered the tactics that Casual Dining can use to set itself apart:

  • How casual dining can leverage their social, "bragworthy" nature by becoming more mobile-friendly
  • How small plates, late night menus, bar bites, and other shareable menu items can attract adventurous diners looking for a communal dining experience
  • How some casual operators are creating new fast casual counterparts to differentiate themselves and capture lunch patrons

We also look at the ways foodservice manufacturers are primed to help, including the existing knowledge areas that foodservice manufacturers can leverage to support operators create sustainable long-term impact and regain momentum. Login to find out what you can do to drive operators' success.

Login To Gain Access To This Content
Jun 11

Navy Foodservice Ashore Solutions Conference

This conference is for all on-shore military personnel, affiliates and foodservice professionals including 100+ military, Department of Defense (DOD) and 50 food manufacturers. The event makes up an eclectic group of industry personnel. 

Making Sense Out of the Complexities of Foodservice

Doug Brooks, former CEO of Brinker (Chili's and Maggiano's), described several key foodservice industry trends and discussed how operators can respond to these trends at Chain Operators Exchange, COEX. In this environment of marketplace mayhem, the challenge for restaurants is to adapt and improve without losing sight of their brand's core values.

 

Operators on Driving Consumer Demand

Consumers have become more knowledgeable about the food they eat, and are increasingly interested in doing business with companies in all industries, including foodservice, who share their values and are part of their community. They also care a great deal about experiences and value. Therefore, creating demand in the future will still be about the basics of food, service, and cleanliness, but will increasingly be about experiences and choices.

Industry-Wide Initiatives Changing the Face of Foodservice

Foodservice manufacturers, distributors, and operators have many mutual goals - above all to grow the industry by providing greater value to consumers. In an unprecedented presentation at Presidents Conference 2013, Larry Oberkfell, Dawn Sweeney, and Mark Allen took the stage together to evoke a call-to-action for the entire industry.

Supermarket Report Provides Insight Into a Growing Channel

Datassential's newest segment report gives an in-depth analysis of Supermarket Prepared Foods, including who their patrons are, their offerings, what they want from suppliers and much more. Increase your understanding of the supermarket segment and how to grow in it with this hot-off-the-press report.  

Leading operators on innovation, sustainability and supplier relationships

Find out what leading foodservice operators had to say on innovation, sustainability and managing supplier relationships at COEX 2013.

Trends in Specialty Beverages

Specialty beverages are moving through the menu adoption cycle faster than ever as more and more new items are introduced into the foodservice marketplace. At a July 2013 Chain Operator Forum, these trends were presented and discussed in an open forum with leading chain operators and foodservice manufacturers.

Collaboration Techniques for Menu Changes, Product Improvements and Reacting to Today’s Demanding Guests

No activity is more mission critical for restaurant operators than menu development. Poor attempts at menu development won't always mean the demise of a concept, and successful menus won't ensure business success, but the quality of menu development definitely affects a restaurant's success. 

Operators on Driving Supply Chain Efficiency

The foodservice supply chain matured over the past decade, with increased use of technology, more data, and improved collaboration. We asked operators to weigh in on how this has effected them.

“It’s not personal, it’s just business.”

It's a phrase you hear often in business dealings. Yet in today's rapidly evolving world, this mindset leads to rigid, us vs. them relationships that can't withstand a market that demands constant change and adaptation. At Presidents Conference 2013, Kate Vitasek, author of the book series Vested, took the audience deep into collaborative relationships to help them understand which types are appropriate for which relationship.

6 Impending Changes in Foodservice

The foodservice industry is maturing and the industry struc­ture is changing. Consumers now hold more power. There is industry consoli­dation and significant increases in aggregated purchasing by operators. Distributor profitability will increasingly be tied to supply chain efficiency. How will manufacturers and industry partners need to evolve to profit in 2020? Read the Marketing & Sales Leaders Forum executive summary to find out.