Growing Your Business In A Challenging Environment€¦ · 04/07/2017 · Growing Your Business In A Challenging Environment. 2 ... If restaurants are to succeed in this challenging

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Presented by

Growing Your Business In A Challenging Environment

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This is the situation…

-0.4% +1.3%

Traffic Check Dollars

15 Billion JFM’17

$111 Billion JFM’17

+1.6%$7.52

Per Eater

Source: The NPD Group/CREST®

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How you can grow revenue

Increase Reach Drive Purchase Frequency

Increase Checks

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To drive growth, operators must reverse the decline in purchase frequency

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1.Price really matters

2.Consumer resistance

3.How to increase restaurant visits

4.What you can do

Agenda

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Data sources

CREST®Checkout TrackingSM

Checkout PanelistsSurvey

Mobile app for consumers with iPhones and Androids

Users upload receipts for purchases made across all retail channels and categories

Transaction level detail captured provides a longitudinal view of consumers’ purchases behavior

50,000 active participants today, 13+~32,000 restaurant users submitting ~4.1MM receipts

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PRICE REALLY MATTERS

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The #1 driver of restaurant trafficShare of Traffic*

*Excludes Convenient Location – year ending Dec. 2016


Good Price Treating Myself Food Variety/Quality

23% 13% 13%

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Food inflation – “story of the year”Eating at Home is Cheaper

-4%

-2%

0%

2%

4%

Q2'13 Q4'13 Q2'14 Q4'14 Q2'15 Q4'15 Q2'16 Q4'16

Graph shows quarterly inflation % change versus year ago

Source: Bureau of Labor Statistics

Away from Home

At Home

Qu

arte

rly

Infl

atio

n %

Ch

ange

Convenience vs. Cooking

10 10

Industry slowdown is everywhereTraffic % Change vs. YAGO

9% 10% 8%5%

1% 0% 0%

6% 4%

% Change vs. Year Ago

JFM'15 AMJ'15 JAS'15 OND'15 JFM'16 AMJ'16 JAS'16 OND'16 JFM'17

Full Service

QSR excluding Fast Casual

Fast Casual

( 75% )

( 6% )

-1%-2%-3%-4%-3%-2%-2%-2%-4%

0% 1% 1% 2% 1% 0%

-1%

0% 0%

( 19%)


Retail – NC C-store +1

(Share of Traffic JFM'17)

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-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

<$3 $3-$5 $5-$7 $7-$10+

YE Dec'15 % Traffic YE Dec'16 % Traffic YE Dec'16 Value

Eate

r C

hec

kD

istr

ibu

tio

n

Val

ue

Co

mp

osi

te S

core

Reality68% - $5-10+

Price satisfactionQSR Burger Lunch*

*Excludes Fast Casual Burger


Sweet Spot

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$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

Los Angeles, CA Dallas/Ft. Worth, TX Atlanta, GA/AL/NC Chicago, IL/IN Orlando/Daytona New York/CT/PA Wash.D.C./MD/PA/VA/WV

Philadelphia,PA/DE/NJ

December '15 December '16

The proof is in the puddingChicken Sandwich – Average Selling Price

Source: The NPD Group/Checkout Tracking SM

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0%

20%

40%

60%

80%

0%

20%

40%

<$10 $10-$15 $15-$20 $20+

YE Dec'15 % Traffic YE Dec'16 % Traffic YE Dec'16 Value

Eate

r C

hec

k D

istr

ibu

tio

n

Val

ue

Co

mp

osi

te S

core

Price satisfactionCasual Dining Dinner


Sweet Spot Reality

50% - $15-20+

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If restaurants are to succeed in this challenging marketplace, they must address their value proposition – it currently does not seem to resonate well with consumers.

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15 15

High profitability – high popularity Low profitability – high popularity High profitability – low popularity Low profitability – low popularity

Determine which foods drive your customers strongest value proposition

Evaluation of Menu PricingIs Warranted

Understand what parts of the menu require attention

Know the price ranges at which your customers are most satisfied

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Consumer Resistance

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“I watch how I spend my money on my purchases.”59%

“I think restaurant prices are too high.” 39%

Source: The NPD Group/Checkout TrackingSM Restaurant Re-contact Survey, September 2016

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Consumers manage restaurant spend

Trade Down Cutback On Visits

Order Fewer Items

Promotions

and Deals

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Importance of buyer groups Understand how dependent the restaurant industry is on these buyer groups based on their frequency of visits.

Source: The NPD Group/Checkout TrackingSM Total Channel

SUPERLIGHT

LIGHT

MEDIUM

HEAVY

Less than once a week

Once a week

2 times a week

3+ times a week

October 2016

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Who’s to blame for slow growth?

30% 28%

25% 25%

23% 26%

22% 21%

6 ME August'15 6 ME August '16

SUPERLIGHTLess than once a week

LIGHTOnce a week

MEDIUM2 times a week

HEAVY3+ times a week

% of Restaurant Buyers: Purchase Frequency Distribution ’15 vs ‘16


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HOW TO INCREASE RESTAURANT VISITS

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“Give me a real deal”

They want to choose the deal 10%OFF


All restaurant customers claimed they would visit restaurants more often if operators offered more price incentives.

This suggests that what is currently offered as a deal is not resonating with consumers.

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“Reward me for my visit”All groups are interested in rewards programs, they are most appealing to Heavy Buyer

NPD Checkout Tracking Survey – September 2016

Heavy Buyers

Medium Buyers

Light Buyers

52%

46%

46%


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“Treat me well”

Based on satisfaction at lunch; Service also had highest correlation at dinner

Source: The NPD Group/The Changing Dynamic at Lunch report

Pleasant service

Responsive

Food quality

Pleasant service

Food quality

Taste and flavor

QSR FSR

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Source: The NPD Group/Custom Study

So what can you do?

Look at menu prices

Target heavy and light visitors

Remember: “Treat me well”

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Being served

Appeal to a specific craving

Someone else cooks

Don’t have to clean up after you eat

Eating out is a reward

Messaging To Get Them Out Of The House: Promote Restaurant Benefits More Clearly

Source: The NPD Group/Custom Study

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QUESTIONS?

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Thank youThank you

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STUDY PARAMETERS

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About This Report

Source: The NPD Group/Checkout TrackingSM Total Channel

Checkout TrackingSM Total Channel

Receipt harvesting mobile app for consumers: iPhone and Android

All categories, transaction level, longitudinal

Crosses channels

Panelist demographics and cross-shopping activity

52,000 active participants today, 13+

Weighted and projected to the U.S. Census

Restaurant Re-Contact Survey to Checkout Tracking Panel

Other Information Sources: CREST® & BLS.gov

INFORMATION COLLECTED

A static sample was used, so the same buyer groups are analyzed across time periods.

Panelists were re-contacted in September 2016 and asked to answer eight questions regarding their state of mind on the economy and restaurant usage in the past 12 months, if they had any.

The data presented in this report is based on 12 month usage ending August 2016 unless otherwise noted.

Report based on responses from almost 9,100 restaurant users.

Growing Your Business In A Challenging Environment€¦ · 04/07/2017 · Growing Your Business In A Challenging Environment. 2 ... If restaurants are to succeed in this challenging

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