According to the NPD Group, consumers cut back on dining out in the second quarter of 2022. The year-over-year comparison shows a 2% decline in physical and online restaurant traffic. Restaurant spending, however, was up 2%, reflecting the higher menu prices.
Quick service restaurants received the lion’s share, with 82% of total restaurant traffic. It’s interesting to note that breakfast offerings faired the best, with no decline in traffic.
According to NPD’s Food Industry Advisor, David Portalatin, restaurant diners are reacting to higher menu prices and rising inflation in three ways:
- Reducing restaurant visits
- Ordering lower-priced items
- Cutting back on the amount ordered
Portalatin recommends differentiating value. Differentiating value refers to the benefits your product delivers to your guests over and above those offered by the competition.
Modern Restaurant Management reported on the tactics several restaurants are taking to increase their value.
Increasing Your Restaurant’s Value
- Uno Pizzeria and Grill is giving in-house diners $5 off for a set time.
- Mighty-Quinn’s Barbeque dropped their prices on their signature meat samplers.
- Bertucci’s cut prices by as much as 75% on LTOs.
- Bob Evans Restaurants created a breakfast menu with four-tiered price ranges.
Defining Your Restaurant’s Value
Keep in mind that a restaurant’s value is much more than the price comparison. It includes the quality of your food and service as well as the psychological value.
Psychological value in restaurants is a little hard to pin down. It takes a deep understanding of the human psyche and how it responds to different scenarios and environments. For example, social proof refers to people’s desire to do things because other people are doing those things. This tendency is why new restaurants can experience massive waiting lists. They only keep these, however, if they come through with great food, service, ambiance, and the all-important experience.
To take advantage of this psychological tendency, prioritize reviews. This demonstrates to others that people visit your establishment. You can automate your restaurant review requests through emails or push SMS, making it easy for customers to add to your online reviews.
Companies appeal to our emotions all the time. They talk about their company culture, the number of tennis shoes they’ve donated, or the remote villages where they’ve found a way to get fresh drinking water to. This type of appeal makes us want to be a part of their experience, contributing to a worthy cause.
Like most things in life—the saved trinket, the photograph, the person sitting next to you on the subway—almost everything in your life has a story to tell. What story does your restaurant tell?
If your first thought was “farm-to-table,” that’s a great beginning but not the complete version. A farm-to-table concept means that you support the local community, offer fresh food, and have reduced your carbon footprint. Do your guests know that? Do they know the farmers that you support and their stories?
More and more guests want to know where their food comes from—the story behind it. Some want to know their coffee beans come from a sustainable coffee brand, one that grows the beans in the shade, which means they don’t destroy natural rainforests. They want to know the fish they eat aren’t on the endangered list and that the protein sources come from farmers who practice humane farming methods.
Your restaurant’s story is what makes you unique. It may be your values and vision and provides an emotional and engaging connection with your guests. It resonates with your ideal guest, activates their emotions, and is found across all channels of your business, from website to interior design, social media, the service, and the supply chain.
Differentiating Your Restaurant from Competitors
It takes a strong pull to create a new preference among restaurant guests. After all, we, as humans, tend to fall into comfortable habits. We go to the same coffee shop on Monday mornings, head to our Wednesday lunch spot, and stop by the local neighborhood eatery on Friday evenings. It takes a compelling market differentiation to pull the strings that drive us away from our patterns.
Is market differentiation competitive pricing, good food, and excellent service? Not really—that’s just the basic requirement of being in the restaurant industry. Market differentiation is what sets you apart. Consider your target customer and what will compel them to try your restaurant just once in order to realize what they’ve been missing.
What sets a restaurant apart?
Setting your restaurant apart involves differentiating yourself from your competitors. To do that, you must start first by knowing your competition. Visit their restaurant and stay abreast of their social media marketing strategy. Keep keenly aware of their restaurant menu pricing and changes in their offerings.
Know who your VIP or frequent guests are, and then direct your marketing strategy towards others in the area that falls under this domain. Create a story and deliver on that promise. Create signature dishes and focus on value, which includes that secret recipe that no one can experience anywhere else.
How can I make my restaurant buzz?
Whether it’s your first opening night or you’re developing your expansion plans, creating a buzz is one of the most exciting events for restauranteurs. Creating excitement that gets customers in the door and then makes them repeat guests with your exquisite food and service is the key to success.
This may sound repetitive, but effective marketing requires knowing your target market. There’s just no way around that piece of the successful restaurant puzzle. Know your market and then drive your marketing strategies toward that audience.