The price of consumer goods have been steadily on the rise for some time now, impacting menu prices and average check size for restaurants. Fortunately, we’re seeing a very understanding customer – up to a point.
Consumers have shifted their eating habits to favor value-driven menus. Fast casual and quick-service restaurants stand to benefit the most here, which in turn requires full service and fine dining restaurant segments to be more strategic about how they market their dishes and the unique value they provide to the complete dining experience.
The key here is to find the right balance and ensure that prices reflect the quality of ingredients and preparation. Just this last year alone, full service meals and snacks have seen a price increase of 8.1% while limited service options have increased by 6.7% alone. With the pandemic patience waning faster than ever before, the consumer expects value for that price increase. A vacationer can plan to spend around $18.00 per meal while on holiday before any alcohol sales. What is the best way to package and bundle value into the dining experience while giving the consumer an earned sense of value while also maximizing profit?
There are a few strategies available to implement that deliver on value while maintaining profit margins essential to operations.
Value-Driven Restaurant Operations
Revisiting Happy Hour
Happy hour is one of the original added value strategies for the full service restaurant segment. But when was the last time you changed your approach? There’s more to be done within that time frame. Implementing a”reverse happy hour” or a late night happy hour option where the kitchen can still provide cost and time-beneficial elements of their traditional menu, while the frontline workforce can still focus on selling more drinks. This also adds an atmosphere to the restaurant atmosphere that gives customers a reason to stay longer and try something new.
Bundling Menu Items
You can create value bundles or add-ons such as free drinks with select meals for a set price, group platters for sharing, discounted house wines or beers, and other culinary treats like desserts or appetizers at reduced prices. Bundling items together improves the speed of service, keeps costs in check, and makes it easier for customers to try something new while they’re ordering. It’s also important to offer bundle deals or discounts on meals for children or seniors so that you can both attract customers across generations.
Offering New Promotions
Consider offering a promotion on social media or through email marketing, like free appetizers with purchase of any entree or discounted cocktails during happy hour. You could also create a loyalty program, where customers can earn points for each purchase and redeem them for discounts or free food. This encourages repeat business and helps to build customer loyalty.
Enhancing the Experience
Think about how you can make your restaurant stand out from the competition and provide an enjoyable experience for your guests. Consider offering unique activities or entertainment, like hosting karaoke nights or putting on a weekly trivia night. You could also hire local artists to showcase their work and give customers something interesting to look at while they eat. Finally, make sure that your restaurant’s atmosphere is inviting, warm, and welcoming.
Capitalizing on Short Term Gains
Another value-driven tactic for those in highly trafficked, tourist towns: offer a 2 for 1 option that many vacation destinations implement during the shoulder seasons to encourage and reward locals. The point is to fulfill the value discrepancy between what the consumer was paying for a meal one year ago and what they are expecting to pay now. Creating stimulating and engaging strategies is only the beginning of the fun!
Summary
Regardless of what approach you take, just make sure every change to your restaurant operations is measurable. Keep track of metrics like labor hours, revenue per customer and food costs. This helps you determine how successful your tactics were and how to optimize your approach going forward.
Thanks for reading! We hope this article was helpful in outlining valuable strategies for restaurant operators looking to do more than ‘get by’ through an unpredictable, challenging environment.
