QSR Value Menus Proving Effective in Increasing Customer Visits

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QSR Value Menus Proving Effective in Increasing Customer Visits

05/03/2018
McDonald's counter

CHICAGO — Value menus are driving traffic in a flat market for quick-service restaurants (QSRs), according to The NPD Group, which found that value menu traffic for total QSR increased by 10 percent and consumer spend by 13 percent during the first quarter of 2018.

In late 2017, three major chains entered the "value wars" after McDonald's announced a new value menu would launch in January 2018. The company's primary goal was to win back customers it had lost in recent years after moving away from value. In response, chains like Taco Bell and Jack in the Box introduced their own value offerings to directly compete with McDonald's in order to retain their customer base.

Along with driving traffic and winning back or retaining customers, the idea of value menus is that once a customer has ordered from the value menu, they would also order from the regular priced menu.

Results for each of the three chains varied, but on average for all three chains 72 percent of consumers who purchased from the value menu also purchased from the regular menu, according to the NPD report Value Wars 2.0: The Value Menu Strikes Back.

The report is based on research that analyzes actual receipts from consumers and can follow the same consumer's purchasing behavior over time.

"A value proposition is definitely warranted to increase customer visits and drive frequency in today's marketplace as the recent crop of value menus bear out," said Bonnie Riggs, restaurant industry analyst for NPD. "But it's important to fully understand the impact and effectiveness of these promotions, whether it's understanding value-seeking customer behavior or loyalty erosion."