Restaurant consumer discontinuity can’t be avoided by discounting.

To contact us Click HERE


The retail food landscape is continually evolving. Consumershave grown accustom to ready-2-eat and heat-N-eat fresh prepared food.  Today you can find ready-2-eat and heat-N-eatfresh prepared food within every sector of the restaurant industry includingQuick Service, Limited Service and Full Service.  Most important virtually all restaurants offertheir food via Take-Out, Delivery, Drive Thru, or Take-Away.
Convenience Stores, Grocery Stores and Chain Drug Stores allhave taken notice of the success that restaurants are having with fresh mealsfor Take-Out.  Concurrently Chain DrugStores, Grocery Stores and Convenience Stores have developed and continuedeveloping “restaurant quality” ready-2-eat and heat-N-eat fresh prepared mealsand meal components. In most cases these are “new” offerings for thesecompanies are creating new avenues of distribution for ready-2-eat andheat-N-eat fresh prepared food.
Many legacy restaurant chains have utilized discounting totry to stem the tide of customer migration. This is simply put a bad idea. Myfriend Jeffrey Summers analyzed the numbers on discounting and here is what hefound: 
If your regular gross margins are 30% and you…
…give a discount of 5% you have to increase top line salesby 14% to generate the same gross profit.…give a discount of 10% you have to increase top line salesby 35% to generate the same gross profit.…give a discount of 15% you have to increase top line salesby 70% to generate the same gross profit.…give a discount of 20% you have to increase top line salesby 140% to generate the same gross profit.…give a discount of 25% you have to increase top line salesby 360% to generate the same gross profit.
Either creating Limited Time Offers or new menu items as anentity with identity is a much better way to go.  Restaurants need to expand branded retailitems in-order to maintain consumer relevance. New points of distribution haveempowered choice for consumers.  A brandis an invitation. Is your brand compelling?
This blog is supported by ads.  Please view them.
Invite Foodservice Solutions® to complete agrocerant program assessment, brand, product placement or positioningassistance.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the globalleader in the Grocerant niche visit Facebook.com/Steven Johnson,Linkedin.com/in/grocerant or twitter.com/grocerant.