As we deepen into economical recession, fast food restaurant chains try to enter the casual dining segment by targeting consumers with higher ticket averages, further narrowing the gap between both segments. Burger King, the second largest hamburger chain in the world, has installed new equipment and broilers in 60% of their restaurants in the USA and Canada. These new grills can cook thicker hamburgers, ribs and other menu items, normally seen in casual dining restaurants such as Applebee’s, Chili’s or Ruby Tuesday. At the same time, there continues to be an increase of “economically-friendly” menus such as the ones offered by Sonic and KFC, which in some cases range from 99 cents to less than 2 dollars. In this state of the economy, restaurants are pretty much obligated to innovate, constantly changing their offerings in order to captivate the client’s attention.
So which is a better strategy? The American consumer has good memory; well, let us call it selective memory that is a better term. One of the biggest problems that these low-budget menus yield can come about when the economy begins to improve. Consumers will continue to request and demand thee offerings from the chains that originally offered them.
A better strategy would be to offer more value with the offer: to create a family combo or give something additional for the same price. But, this could also backfire. Clients could simply forget everything as credit is re-established, if gasoline continues to keep under US$ 3 a gallon, and they just might act the same way they did before the collapse of the economy and by continuing to live beyond their means, spending what they don’t have and generating debt they can’t afford to pay. Time will tell. What it is clear is that this is NOT the time to stop innovating, it is not the time to in a corner and cry and pout; this is the time to raise your chin, shake your head, and do what you have to do to keep afloat. Let us learn from some international markets in which restaurant chains continue to expand, opening additional stores, continuing to increase their ticket average and by increasing their brand awareness.
