Promotional activities increased by 10% in the first half of 2023.
Last year, the top chains in the UK ran over 3000 different promotions. However, in the first half of 2023, the number of promotional activities increased by a further 10%, according to recent data from Meaningful Vision Ltd.
The most popular promotions revolve around price reductions which account for nearly 70% of all promotions this year. Fast food chains entice customers with special price offers (45%), limited-time discounts (24%), and coupons to encourage purchases. These price promotions can apply to the entire assortment or specific items.
In addition, combo meals and meal deals provide better value for money. Whilst price promotions are typically time-limited, meal deals have become a regular and prominent feature on daily menus. Almost 23% of the menu for top QSR chains contains some combo offers, for example, a main meal, side, and drink.
Price promotions usually entail offering special prices or discounts in either percentages or pounds (£). Interestingly, promotions chiefly focus on percentage discounts rather than monetary gains, with a ratio of 4/1 towards percentage discounts.
Another widely used technique is to add value for the customer by including free or extra products. This method accounts for 16% of all promotions.
Promotions can also be utilised to retain existing customers. Nearly all fast-food chains have loyalty programs that offer customer loyalty rewards and encourage repeat visits. These programs also enable chains to gather customer information and establish direct communication channels via email or an app. The share of promotions run via applications accounts for 17% of all promotional activities in the market.
Promotions extend beyond restaurants alone. Delivery aggregators also employ similar strategies, leveraging loyalty programs to encourage repeat purchases and larger orders. Free delivery is another popular strategy, accounting for 16% of all promotional activities.
But are the discounts offered by these promotions getting deeper? According to Meaningful Vision data, the average discount offered by promotions was 25% last year. However, in the first half of 2023, the average discount has risen to 32%.
Maria Vanifatova, CEO of Meaningful Vision Ltd, commented: “Promotions have always played a crucial role for food retailers, facilitating upselling, and offering discounts or value meals to attract budget-conscious customers seeking affordable dining options. During times of economic uncertainty and rising living costs, the significance of promotional activities is growing even further. To ensure customer satisfaction and retention, restaurants are making more promotional offers, with deeper discounts. If consumers must pay more and restaurant chains cannot restrict price growth, they need to feel that they are getting additional value for money. Meanwhile, restaurants are faced with the challenge of finding creative ways to differentiate themselves from competitors. For these reasons, tracking competitors’ promotions is vitally important.”
Resource: qsrmedia.co.uk
