During periods of challenging economic conditions and the accompanying increases in living costs, restaurants face the task of effectively managing prices while ensuring customer satisfaction and retention. Promotions play a pivotal strategic role under these circumstances, offering incentives for customers to continue patronising your establishment. By offering discounts, special deals, or value meals, restaurants can attract budget-conscious customers seeking affordable dining options. These promotions help mitigate the impact of rising costs on customers and provide them with more affordable choices.
Is promotion activity becoming more intensive?
Yes, according to the Meaningful Vision Promo Intelligence tool which tracks promotion activities in different channels. In the UK, top chains run over 3000 different promos annually. In the first half of 2023, the number of promo activities increased by 10% compared to the previous year.
What are the most popular promotions?
The most popular promotions in the UK fast food industry are centered around price reductions, accounting for nearly 70% of all promotions this year. Fast food chains entice customers with limited-time discounts, special price offers, and coupons to encourage purchases. These price promotions can apply to the entire menu, or only to specific items. Additionally, combo meals and meal deals provide better value for money. While price promotions are typically time-limited, meal deals have become a regular and prominent feature on daily menus.
Price promotions usually entail offering special prices or discounts in either percentages or pounds (£). It’s interesting to note, most promotions focus on percentage discounts, rather than monetary gains. Another method of adding value is by including free or extra products, which accounts for 16% of all promotions.
Furthermore, promotions can be utilised in an effort to retain existing customers. Nearly all fast-food chains have loyalty programs that offer exclusive discounts or rewards. By implementing these programs, restaurants can foster customer loyalty and encourage repeat visits, gather customer information, and establish direct communication channels via email or an app.
Promotions enable restaurants to instil a sense of urgency and enthusiasm among customers; limited-time offers and seasonal promotions create anticipation with the potential to motivate customers to explore new menu items or visit the restaurant before the promotional period expires. This can result in increased foot traffic and sales during specific periods, aiding restaurants in navigating challenging economic times.
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 based on Meaningful Vision data.
Are promotions becoming deeper?
Despite having more control over pricing, the fast-food industry has witnessed rapid price growth, with an 18% increase in May’23 compared to the previous year.
This raises the questions: how extensive are the promotions, and do they offset the price surge? According to Meaningful Vision data, the average discount offered by promotions was 25% last year, but in the first half of 2023, the average discount has risen to 32%.
What products do chains promote?
Meal deals are frequently designed to facilitate upselling and cross-selling. Restaurants strategically combine popular or high-margin items with the main dish to tempt customers into adding extra items or upgrades to their order. This approach helps increase overall sales volume and revenue.
Moreover, meal deals can set a restaurant’s promotional offerings apart from competitors. By crafting distinctive and appealing combinations, restaurants can distinguish themselves in a saturated market and entice customers to select their meal deals over those offered by other establishments.
Why is tracking competitors’ promotions important?
Keeping track of your competitors’ promotions is crucial in the restaurant industry. Promotions are key for managing prices, attracting customers, and fostering loyalty. By keeping an eye on competitors’ promotional activities, restaurants can adapt their strategies, offer compelling promotions, and maintain a competitive edge in a dynamic market. Meaningful Vision offers valuable insights into competitors’ promo activities, empowering informed decision-making and helping restaurants navigate the challenges posed by the cost-of-living crisis.
Talk to our experts to learn more about your competition promotional activities