Where are all the Casual Dining Customers?
There’s not a lot a beverage executive can do about store traffic. But without an increase in customers, any innovative or interesting beverage development isn’t likely to drive sales. As the VIBE Conference approaches, we spoke with NPD Group’s Vice President, Client Development for Foodservice Warren Solochek, who this year will look at why chains are struggling with building traffic through promotions.
Why is building traffic so important for folks in charge of beverage?
Instead of talking about and focusing on beverage alcohol, as I have done at previous conferences, I thought it was time to look at part of what has been driving people to casual and fine dining lately, the various offerings available to customers. In 2013, we saw that there were a lot of promotions going on in casual dining particularly among the biggest chains to bring people into their units, because traffic was so slow. They worked for a little bit but not really very much. As we got into 2014, what we saw were the kinds of offerings that were made available must have changed, as the percent of people saying they were taking advantage of promotions declined.
Why do you think that is?
My theory on this is that casual dining is in a really hard spot relative to the rest of the industry, and despite anything the beverage people do, if you can’t get people thru the door, it doesn’t make a difference what your assortment is or pricing is. So we’ll be looking at what has worked and the things that don’t work. We hope people will be able to take what we tell them back to their marketing and promotion folks so they can change it up, because traffic has been very weak.
Tell us about one of your findings?
For example, in 2013 there were a lot of promotions centered on bundling, two for $20 or $30 or things like that. Initially, these things caught peoples’ eyes because it felt like a deal. But I think the perceived benefit that those kind of offers provided is much lower now; secondarily, I feel like there has got to be something better that can bring people in. It might couponing - we’ve seen a big increase among fast casual and quick serve, and the fast casual guys have been successful at it because customers have been willing to provide their email addresses. They seem to feel that if they provide some information, they will benefit. I think casual dining in this area is behind.
I think today the casual dining folks have less of a capability than fast casual players in adding one-to-one communication with their customers. There may be chains that can do a better job of that, but looking at the biggest bar and grill chains, I don’t think any of them are doing a very good job getting their customers to come in more often.