Fast-food chains tout the value of burgers, pizza and tacos as inflation squeezes budgets, but as companies rethink their value strategies, prices go up, portions go down, and people sign up for rewards programs. It is expected that
Due to rising costs, Domino’s Pizza increased the price of its Mix & Match delivery deal from $5.99 to $6.99 this year, making its $7.99 domestic takeaway offer available only for digital orders. Burger King has taken the Whopper off its value menu and he has reduced the 10 piece nuggets to 8 pieces. According to Yelp, it’s the first time customers have mentioned “shrinkflation” in a restaurant review, most commonly at places that serve affordable food like hot dogs, burgers and pizza.
“We’ve seen companies tweak their value menus across the board,” said Michael Schaefer, global head of food and beverage at market research firm Euromonitor International. There are fewer, limited price increases, and smaller items.”
The change marks the latest chapter in the continued evolution of the traditional value deal that has characterized many fast food chains. In the years since McDonald’s ditched his popular dollar menu and Subway put the brakes on his $5 Footlong campaign, the industry has sought to reduce its reliance on promotions that hurt its profit margins. Experts say it has.
And as companies face rising raw material and labor costs, rethinking their value strategies has become a new imperative.
Despite quietly raising prices and changing menu items, experts say fast-food companies are aiming to get more from each customer while offering personalized deals. There is an increasing focus on value strategies around mobile apps and rewards programs that enable
At McDonald’s For example, customer Download the app and sign up for our rewards program to get a free order of big French fries and 1,500 bonus points.
On last month’s earnings call, McDonald’s executives said the program would encourage customers to come to the store more often, and another benefit could ultimately be the ability to offer more personalized deals. I said yes.
In contrast, the national promotion gives discounts even to those who would have paid more, said McDonald’s chief executive Chris Kempczynski.
“There’s a lot of waste in that,” he said.
François Acela, director of research and consumer analytics at Revenue Management Solutions, a restaurant data analytics firm, said that personalized offers could help businesses profit more while offering customers discounts on items they actually want. It has the advantage of maintaining the rate.
“Brands can say, ‘Oh, that’s because of inflation,’ but I think they’ve been trying to move away from this lower price point for quite some time,” said Acerra. “Brands want to leverage their guests’ purchase histories to deliver value to consumers as long as they can maximize customer lifetime value in the long run.”
Apps help businesses do just that. Given how often people check their phones, apps on home screens “are like billboards that keep on delivering,” said Adam Blacker, director of content and communications at data analytics firm Apptopia. I’m here.
“The speed with which we see it, the importance it holds in you, just seeing that logo every day has an effect,” he said.
The app can also provide information about when and what customers have ordered and what promotions they have responded to, allowing businesses to improve their strategies around transaction push notifications.
Still, rewards programs are a relatively new and developing area for many companies. In the meantime, one of his ways businesses are offering more targeted deals is by giving local operators more flexibility.
McDonald’s executives said the chain will run national promotions, such as $1, $2 and $3 menus, but allow regions to choose which offerings to offer. Papa John’s management also noted that there is room for their restaurants to adjust deals.
“Discounts in San Francisco are different than discounts in Atlanta or Ohio,” CEO Rob Lynch said on the company’s earnings call.
However, experts say that even though fast food chains will become more targeted in the next few years, they still need to continue offering eye-catching deals to attract specific customers.
“It may look a little different than it has been in years past, but there will always be high-profile, low-priced items that drive traffic and high-margin add-ons,” said Schaeffer of Euromonitor. said.