Marketing
Combating the Slump: 3 Key Strategies to Reverse Falling Restaurant Traffic
Oct 01, 2024
At Isabel, the sleek Italian eatery in London’s trendy Mayfair neighborhood, one won’t find typical fare. The destination boasts handmade pastas, gnocchi and slow-cooked beef short ribs, yet none are enhanced by conventional ingredients. Of note is the tuna tartare, a shareable dish blurring the lines between cuisines while elevating its presence with ponzu dressing, lime, caviar, wasabi and guacamole.
It's a strategy more operators are moving toward to ward off falling traffic at their establishments, whether they’re casual-dining restaurants or QSR as well as on-site offerings at hospitals, K-12 schools, and colleges and universities. Consumers are looking for deals or at least dishes that pique their interests to keep them coming back.
For consumers, inflation remains their biggest concern when it comes to spending disposable income.1 That’s followed by anxieties around healthcare, political instability and international conflicts. These concerns are particularly among Gen Z and Baby Boomers.
It’s important to note that producers’ costs have increased nearly 25% since 2020 (Producer Price Index: 203.7 in 2020 compared to 253.8 in 2023).2 Those costs have been passed down to consumers, as evidenced by dramatically increased menu prices.
In fact, in an effort to increase profitability, 30% of operators raised their prices in June, and 29% raised their prices in July. As a result, operators said, customers are reducing their visits to establishments. Those reductions were 20% in June and 15% in July.1
Tactics to entice customers back in the past few months have ranged from investing in technology/automation (15%)1 like Taco Bell’s new AI-powered drive-thrus3 to reducing menu sizes (14%).1 Panera, for instance, phased out flatbread offerings4 in favor of more inventive sandwiches and salads. Meanwhile, Dave & Buster’s focus was on value5 (up 24% for operators overall in July),1 offering deals on some of its signature dishes during off-peak hours.
Here are three additional strategies to ramp up traffic.
Focus on value meals and other offerings
Similar to Dave & Buster’s new offering, much fanfare has been made about Burger King’s, McDonald’s and Wendy’s new value meals.6 Burger King’s $5 “Your Way Meal” consists of a choice between a Whopper Jr., Bacon Cheeseburger, and Chicken Jr., plus fries, a four-piece chicken nuggets, and a soft drink. McDonald’s—which recently extended its extremely successful $5 value meal through December—offers a McDouble or McChicken sandwich, small fries, four-piece chicken nuggets, and a small soft drink. And Wendy’s features value meals during all dayparts, including late at night: $3 for “Biggie Bundles” for two breakfast items or the $5 “Biggie Bag” for the rest of the day. That deal includes a choice of four sandwiches, four-piece chicken nuggets, Hot & Crispy Fries, and a small soft drink of choice.
According to CNBC, value meals are “making a comeback” because they are an opportunity to lure consumers back into the restaurants.6 With 19% of customers reducing how much they spend when they visit restaurants, the return of the value meal just might be a key ingredient.1 Dataessential reports that customers are adopting several strategies to save money at restaurants, including looking for deals on restaurant apps (28%); stretching combo or meal deals by saving an item for later (20%), and looking for restaurant “menu hacks” on social media (15%).1
“This has always been an industry where value is critically important,” Sara Senatore, senior analyst at Bank of America Securities, told CNBC. “We’re seeing what I would characterize as a little bit more of a return to normal."6
Happy hour offerings at casual dining restaurants and other sit-down establishments may be another way to increase traffic. They may prove to be essential because consumers are noticing price increases at foodservice establishments. For instance, 59% of consumers at fast-casual restaurants have noticed; at sit-down restaurants, it’s also 59%; it’s 52% at fine-dining establishments, 36% at sports bars, and 22% at cafeterias.1
The most successful happy hour offerings balance shareable dishes with quality drink options. For example, Morton’s Steakhouse recently added discounted bites to its daily “power hours”7 for customers to devour shareable snacks like Parmesan Truffle Matchstick Fries, thick-cut onion rings, hand-cut potato chips, prime burger sliders and braised pork belly bao buns. They pair nicely with the wine and cocktail deals.
Here are some additional ideas for happy hour offerings to drive traffic:
Duck Fat Fries with Duck Confit, Blackberry BBQ Sauce and Chevre
Mediterranean Chicken, Spinach and Feta Flatbread with Cucumber Tzatziki Avocado
Leverage LTOs
Limited time offerings (LTOs) are another way to bring new customers into the operation. Through savvy marketing, it’s also a way to bring back former loyal customers by enticing them with FOMO (fear of missing out).
In June and July, 29% of operators launched new menu items and/or LTOs, according to Datassential. And 10% and 8% in June and July, respectively, expanded marketing and promotional efforts at their restaurants. Also during those months, reported Datassential, 26% of consumers looked for restaurant coupons that come in the mail and 19% joined restaurant loyalty clubs in an effort to get better deals and know what’s coming down the pipeline.1
With avocados continuing to be a top performer in all dayparts—such as in London-based Isabel’s elevated tuna tartare appetizer— use them to drive LTO traffic and profitability. Consider the following dishes, using these innovative frozen avocado spreads in different flavors as an attractive element.
Breakfast/Brunch: Avocado Toast Board and Lox Breakfast Tacos with Dill Pickle Avocado
Lunch: Crispy Buffalo Chicken Sandwich with Dill Avocado, Slaw and Fries and Vegan Avocado Banh Mi with Dill Pickle Avocado
Dinner: Double Dilly Smashburger and Mediterranean Cauliflower Tacos
Late Night: Greek Fries with Cucumber Tzatziki Avocado and Greek Gyro Wrap With Cucumber Tzatziki Avocado
Invest in menu innovation
In June and July, only 18% and 12%, respectively, of operators prioritized developing and launching new menu items, according to Datassential. The report also said that sales stayed the same for the following:
- entrées (56%)
- sides (70%)
- handhelds (53%)
- breakfast (46%)
- lunch (49%)
- afternoon snack (47%)
It’s also important to note that variety (36%) is a top consideration for consumers when choosing a restaurant, and 11% want to try something new.1
Here's an opportunity for operators to change the narrative if more make menu development a priority. The following menu recommendations include all dayparts with options for immersive food stations:
Breakfast: Breakfast Crunch Wrap
Lunch: Food Station: Greek Gyro Bowl for Senior Living
Dinner: Food Station: Fried Chicken Bites for College & University
Snack: Bacon Pimento Cheese Bites
Late Night: Sonoran Hot Dog
1 Table Stakes Tracker, August 2024 Report Datassential
2 Economic Indicators, August 2024 Report Datassential
3 Restaurant Technology News, August 2024
4 Restaurant Dive, February 2024
5 Nation’s Restaurant News, June 2024
6 CNBC, August 2024
7 Tasting Table, 2024