In an era marked by economic uncertainty and surging consumer costs, the landscape of restaurant promotions is undergoing a significant evolution
In this article, Propeller explores the changing strategies of restaurant marketers. From expected discounts to unexpected and innovative strategies, we map out what’s working in the current climate.
Recent data from Meaningful Vision reveals a notable shift in the strategies employed by the UK’s top 100 food chains. This signals a move away from traditional discounts toward innovative approaches, aimed at delivering unique value propositions and enriching the overall dining experience.
Data indicates a 9% increase in restaurant promotions during the first eight months of 2023. Among the diverse array of food service establishments – including fast food brands, coffee shops, casual dining, and pubs – price offers continue to dominate the promotional arena, constituting nearly 70% of all efforts.
This, however, represents a decline from the beginning of the year when the share stood at a staggering 80%.
Delving deeper into the realm of price promotions, specific item discounts take the lead, comprising 47% of all promotions in August 2023. Following closely behind are discounts applied to the entire menu or specific categories, making up 24% of the promotional landscape.
These strategies are not confined to traditional restaurants alone but extend to delivery aggregators, where they are intricately tied to loyalty programs designed to encourage repeat orders and larger purchases.
In the food delivery sector, discounts hold sway, accounting for 42% of promotions compared to special price offers at 10%. Notably, free delivery is emerging as a popular tactic in 2023, with data showing a significant uptick. Delivery aggregators are employing this strategy twice as often as in the previous year, with free delivery now featured in every fifth promotional offer.
Distinguishing between dine-in, takeaway, and fast-food establishments reveals intriguing nuances in promotional strategies. For fast food, special prices dominate, constituting 80% of all promotions, while discounts claim less than 10%.
A noteworthy trend is the rising popularity of promotions offering free products based on a certain amount spent, or the classic “buy one, get one for free” deal, which has seen a 30% increase, now accounting for almost 13% of all promotional activities.
Maria Vanifatova, Chief Executive of Meaningful Vision, notes the growing importance of promotions amid escalating cost of living prices. She states that when faced with uncontrollable expense hikes, restaurants must leverage ‘innovative promotions’ to enhance customer perceptions of value and distinguish themselves in a competitive market.
Vanifatova advocates a shift from traditional discounting to free offers, emphasising that consumers may grow accustomed to discounts without fully grasping the underlying value proposition. She stresses the necessity of vigilant competitor monitoring and strategic selection of promotional methods to navigate the challenges posed by current market conditions.
Keeping track of your competitors’ promotions is crucial in the restaurant industry. Promotions are key for managing prices, attracting customers, and fostering loyalty. By keeping tabs on competitors’ promotional activities, restaurants can adapt their strategies, offer inventive promotions, and maintain a competitive edge in a dynamic market.
To summarise, the evolving landscape of restaurant promotions reflects a dynamic response to economic uncertainties and changing consumer behaviours.
As dining establishments and delivery aggregators adapt, innovative promotions are emerging as a crucial tool not only to attract customers but also to cultivate lasting loyalty in a market where value perception holds paramount importance.
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