Building Foodservice Profits Through Menuboard Optimization

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Building Foodservice Profits Through Menuboard Optimization

By Angela Hanson - 09/20/2018
Tom Cook and Mark Kuperman
King-Casey's Tom Cook (left) and Revenue Management Solutions' Mark Kuperman presented at the 2018 Convenience Store News Convenience Foodservice Exchange.

DALLAS — In a convenience store foodservice program, the actual food is obviously extremely important. But when it comes to increasing profits, how important are the menuboards that display the products and their prices?

According to Tom Cook, principal of retail branding and design firm King-Casey, the answer is "very."

"It's really decision time — where the rubber meets the road," Cook said during a presentation at the 2018 Convenience Store News Convenience Foodservice Exchange event, held Sept. 12-13 in Dallas.

King-Casey research shows that more than half of consumers (56 percent) are influenced by menuboards, and 74 percent consider easy-to-read menuboards a top priority. These displays become even more important when competing with quick-service restaurants, whose customers expect to see menuboards. Cook views them as an opportunity to persuade people.

The menuboard optimization process should be a disciplined process, not a single step; be grounded in business strategy; and measure progress against established goals. It should also be data-driven, involving consumer research, financial analysis and communications research.

"It all starts with a menu strategy," Cook said.

Specifics are key. While many retailers already have a vague menu strategy in mind, the most effective strategies are tied to specific objectives with metrics for each target, and guide all in-store foodservice merchandising.

To build that strategy, retailers must determine the needs, attitudes and behaviors of consumers inside the store. This process can involve evaluating existing menuboards; performing ethnographic behavior studies, customer intercept interviews and online polls; and other research options, according to Cook. 

Co-presenter Mark Kuperman, chief operating officer at restaurant consultancy Revenue Management Solutions, recommends c-store operators segment their brands based on how customers use them store by store.

In today's retail environment, different restaurants in the same market can make different pricing decisions. Kuperman advised the c-store retailers in attendance to let go of the myth that customers remember what they spend on individual products. Rather, he said they remember total benchmarks, such as more or less than $10.

Fresh prepared food offers more pricing flexibility than a  specific candy bar — a customer might know how much they expect to pay for a Snickers, but not a sandwich.

Along with considering location, demographics, trade areas and local competition when pricing, c-stores should think about revenue channels, daypart usage, response to limited-time offers, and basket analysis. For example, retailers should know what food products customers tend to buy together, so they can spread price changes out, touching different segments at different times.

Kuperman noted that if a c-store goes beyond a 2-percent price change at once, this could serve as a signal to customers that there has been a major change in value.

He also cautioned retailers to think about the timing and magnitude of price changes, as some times are better than others; and to not assume they must raise prices based on a price increase around an individual ingredient.

"Don't fall into the trap of cost-based pricing," Kuperman said.

When it comes to actually creating new menuboards, Cook recommends conducting a self-analysis and going through a three-step process:

  1. Developing a strategic layout, describing in words and schematics how content will be organized to achieve business goals;
  2. Visualizing the new menuboard with illustrations and more detail; and
  3. Relying on research to save time and money.

If done properly, menuboard optimization can increase both speed of service and average check size.

About the Author

Angela Hanson

Angela Hanson

Angela Hanson is Associate Editor of Convenience Store News. Read More