Deals No Longer Driving Foodservice Traffic

CHICAGO -- Consumer perceived deals such as combined item specials and dollar/value menus, which provided consumers with incentives to visit restaurants during the height of the economic recession, no longer serve as an impetus for driving traffic growth, reported The NPD Group.

For the year ending in August 2012, non-deal restaurant visits increased by more than 1 percent in each of the last two years while visits on-a-deal declined during the same time period, found NPD's foodservice market research. This marks a reversal from three years ago, when consumer perceived deals were up more than three percent for three years in a row and non-deal visits were dropping.

A decline in combined item specials and dollar/value menus, each of which represents approximately 20 percent of deal traffic, is driving the decrease in deal-related traffic, according to NPD's CREST, which tracks the foodservice industry based on consumer reporting of over 400,000 visits to foodservice outlets each year. The total number of combo meals ordered is up, but the percentage of consumers indicating that they ordered a combo meal "on deal" is down. This could mean that consumers no longer perceive combo meals to be a deal, or that combo meals have become the everyday price and a way to order a full meal.

The decline in dollar/value deal related traffic is likely tied to a move away from 99-cent items and the type of food items being offered on these menus, stated the NPD Group. Many consumers perceive them to be the way to order individual items, smaller meals or the way to "build your own combo."

However, coupons, discounted prices and senior citizen deals are up.

"In 2008 when economic concerns caused many consumers to stop some of their discretionary restaurant visits, many restaurant operators turned to offering consumers more deals to drive traffic," stated Bonnie Riggs, restaurant industry analyst. "As has been historically the case, when deals are in the marketplace for an extended period of time, consumers tend to expect them or see them as everyday price and not as a deal. What should restaurant operators do? Examine their value proposition, not just in terms of prices but in quality and service; leverage the convenience factor of restaurants; and offer variety, all three of which consumers have consistently told us are important to them."