Dive Brief:
- Consumers are taking advantage of restaurant promotions and deals less frequently, The NPD Group wrote in an email to Restaurant Dive.
- Restaurant deal occasions fell 1% in the quarter ended in September compared to the year-ago period, per the data. Comparatively, non-deal order traffic was down 2% for the period.
- There was only a $1 difference between an average restaurant customer check on a deal and a check that wasn’t related to a deal during the 12 months ending in June, according to the data.
Dive Insight:
Restaurant deals and promotions aren’t paying off as much as they did in the past. Chains with the highest deal rates didn’t outperform other QSRs, according to The NPD Group. QSRs offering deals saw traffic down 1% during the quarter compared to the year-ago quarter. This decline matched traffic dips recorded across QSRs overall. This isn’t good news for chains like Domino’s, which have been running boost weeks and offering discounts in the last few months in an attempt to generate more traffic.
Due to high food and operations costs, many chains have limited their discounts and deals, and some independents and smaller chains are offering little to no deals at all, according to The NPD Group. Many operators have instead increased prices and limited their menus to keep pace with ongoing inflationary and supply chain pressures.
Chipotle, which has increased prices in the last 18 months, has seen many of its lower-income consumers trade down while high-income customers have increased their visits. This consumer trend has benefited the likes of McDonald’s, which isn’t offering a national value menu like its past Dollar Menu, but is relying on local offers and loyalty perks to drive interest.
Top-performing chains that had higher traffic also had the highest customer service scores due to friendly service, food quality, food taste and affordability.
“Operators who want to generate short-term lift via discount promotions should consider creative promotions that don't damage the perception of the brand's long-term value," David Portalatin, NPD food industry advisor, said in a statement.
