As economic conditions continue to pose challenges, with rising living costs, fast-food restaurants are employing diverse promotional tactics to manage prices effectively while prioritizing customer satisfaction and retention. Let’s delve into the evolving landscape of fast food promotion strategies, utilising insights from recent data comparing numbers from 2002 and 2023 years.
Trends in Promotion Activities
The fast food industry has witnessed a significant surge in promotion activities. According to the latest data, there has been a steady increase of 15% in 2023 compared to the previous year. The top 100 fast food chains in the UK ran more than 5,000 various promotional campaigns in 2023. In January 2024, this growth rate further accelerated, with promotional activities increasing by 22%. Specifically, the number of promotions increased by 16% in restaurants, while remaining at the same level for delivery services.
Popular Promotion Types
Price promotions continue to dominate the promotional landscape, constituting a substantial portion of all promotions. Price promotions account for a staggering 84%. In delivery services, they represent 67% of promotional activities. Notably, the structure of promotions in delivery services has seen an uptick in the share of free deliveries, rising from 16% to 19%. This strategy aims to attract more customers, particularly as delivery prices remain significantly higher – up to 20% – than in-store prices.
The special price offer is the most popular promotional tactic, increasing from 64% to 71% in restaurants and from 21 up to 23% in delivery. Discount is the second popular option – 8% in restaurants and increases from 35% in 2022 up to 45% in 2023. Absolute discount (as measured in £’s as opposed to %) is taking 3rd place in both channels and it became less popular last year.
Free/extra products makes for 15% of all promos in all channels and its share remained stable throughout the year.
Deeper Discounts Amid Price Surges
Price promotion is often a discounted offer that makes a product more affordable, especially in a situation of rapid price growth experienced by the industry. The average discount offered by promotions was around 25% last year, slightly decreasing from the previous year, indicating a strategic effort to offset price surges and maintain customer affordability.
Product Focus and Meal Deals
Meal deals continue to reign supreme as the primary focus of promotional offerings, capturing 41% of all product-related promotions. This reflects broader consumer preferences, economic factors, and marketing strategies. These deals are strategically designed to facilitate upselling and cross-selling, boosting overall sales volume and revenue.
Maria Vanifatova, the CEO of Meaningful Vision, explains: “The growth of meal deals is a response by fast food operators to the economic concerns of consumers. With the rising cost of living, consumers are increasingly seeking ways to stretch their budgets. In a competitive market, offering appealing meal combos can differentiate a brand from its competitors and attract customers looking for value-driven options. By continuously innovating and updating their combo offerings, businesses can stay relevant and capture market share.
Why Pizza Meal Deals Stand Out
Pizza meal deals have emerged as a popular choice, catering to group orders and offering perceived value for customers. With the inherent shareability of pizzas, these meal deals provide an ideal solution for families or gatherings. Customers are enticed by the notion of receiving more for their money, aligning with their desire to stretch budgets amidst rising living costs.
Importance of Tracking Competitors’ Promotions
Keeping track of competitors’ promotion activities remains crucial for fast food establishments. By monitoring competitors’ strategies, restaurants can adapt their own promotions, offer compelling deals, and stay competitive in a dynamic market. Insights from data analytics platforms such as Meaningful Vision provide valuable intelligence for informed decision-making in this regard.
Fast-food promotion strategies continue to evolve, in response to economic challenges and shifting consumer preferences. By leveraging data insights and adapting to market trends, restaurants can effectively navigate rising prices, retain customers, and stay competitive in the ever-changing landscape of the fast-food industry.
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