Consumer Perception of Value Is a Moving Target in a Recession – Restaurants Learn Lesson (Part Two)
In Part One of this post we discussed the consumer and how they have changed during this recession. We also looked at the foreseeable future and concluded there is nothing on the immediate horizon that would indicate any changes in your restaurant guests’ spending habits. “Value” is what your customer is looking for in their dining experience.
Before the financial whirlwind that unraveled the economy in 2008, value was simply providing your guest with a fair product at a reasonable price. As the mood of the world fell into worries about jobs, income and the practical issue of spending habits, the simple formula no longer worked. Restaurants found that there were increasingly more components to value. Before 2008 a white tablecloth fine dining establishment may have a great value in a $75 per person dining experience, but the consumer became cash conscious and wasn’t going to part with that many dollars no matter how good the value may be.
At the low end of the scale, as people lost jobs and lost confidence in their financial future, fast food lines grew and even status symbol small extravagances such as a $3 cup of coffee at Starbucks was eliminated from many budgets. Restaurant marketing degenerated into a competition of trying to wrench dollars out of the consumer by heavy discounting, smaller portions and free offers. On a long term basis, we will see if that paid dividends, but many brands are finding loyalty is fleeting and at the whim of the next pitch from chains who can’t seem to connect except through gregarious offers.
Independent restaurants (and a few smaller chains) that have weathered the storm took a different approach. They refused to cheapen their brand by trying to coax the last few coins out of the customer’s pockets. They became creative, inventive and bonded with the guest by serving food that was perceived as catering to the emotional side of the eating experience, finding new proteins and cutting costs to keep margins. They did all of this without discounting their core menu items.
So, the question remains – what is the potential restaurant guest looking for? What does this seemingly elusive target of “value” mean in the diner’s eyes? Based on the brief trends in this recession here is a list that seems verifiable:
- The restaurant guest has a spending limit they didn’t have prior to 2008. No matter how much of a bargain you offer, each demographic has its limits. To some people a $75 meal offered for $39 may be a great bargain and value, but spending $39 isn’t an option in this troubled economy. Other people may see a $10 hamburger at a high end bistro as a value and jump all over it! Disposable dollars is the key in each market. Everyone, rich and poor, is conserving cash.
- Comfort is king. The re-invention of classic comfort food has become the stalwart for many restaurants. The food items that taste good from their childhood and mainstays, which may not have been in a healthy diet a year ago, have become trendy. You see lobster macaroni and cheese, half pound blue cheese bacon burgers, pasta’s with creamy lavish sauces and even cabbage rolls, stuffed green peppers and some ethnic dishes that came out of mom’s kitchen years ago have been elevated to gourmet status. To some degree, healthy eating habits have been put aside in favor of feel good foods.
- Restaurant guests still want service. However, it appears they want service that is more attentive than ever. They demand a smile, a friendly face and interaction with the restaurant staff. Tolerance for rude, uncaring and ill-informed servers is small and will detract from the perception of value more than ever before 2008.
- Little things seem magnified in the consumer’s eyes. An unanticipated gift of a small cookie at the end of a meal may add big value points. An extra item on a plate that wasn’t expected may be interpreted as a sign of offering a real bargain; such as a little scoop of fried apples with that pork chop.
- Finally, the consumer doesn’t want to be tricked! It doesn’t take long for that person who bought a $1 double cheeseburger with a large Coke to figure out they paid $2.50 for 20¢ worth of Coke. They will just buy the burger next time! Fair priced menu items are important. Raising side items to cover cheap entrees won’t add to value expectations.
The restaurant diner has added some astute scrutiny to their menu perusal. They have brought more emotion into the now cherished and less frequent dining experience. Feel good experiences mean as much almost as food taste. Extravagance and elegance are gone from the casual diner’s vocabulary. Will we revert back? Maybe, but it’s going to be quite some time for the public to forget 2008 and 2009.
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