Dixie’s Southern Style

Recession-Proof Marketing

I got a call from a distributor sales representative wanting help with a customer and his menu. Times are tough, and the restaurant operator he was asking about runs a casual restaurant. This customer is into the distributor pretty heavily and isn’t making enough money at the moment to meet his grocery bill.

 

The problem isn’t necessarily the restaurant menu, and in this case, the client doesn’t have the money for a new menu even if it was. And while this restaurant operator may be having trouble with selected items not bringing in enough plate contribution, there is a bigger problem to deal with.

 

As I write this, Target stores sales are sliding, while sales at Wal-Mart are improving. This should tell you something about what the market is like. Discounts abound, so in a tight market, independent restaurant operators need to adjust their menu to attract as much foot traffic as they can.

 

Cash is king. And in a down market, getting people in the door is more than half the battle. What’s happening to most full-service restaurants is people are trading down for meals away from home, and sadly, that means more meals at home or at limited service restaurants. To combat this trend, independent restaurants are going to need to do some serious work on their menu offerings.

 

My advice is simple as an idea, but a bit complicated to execute. I’m most often against using price as a business driver, but after a visit with the Executive Vice President for Global Marketing at McDonald’s, I’ve recently had a change of heart. We were talking about the Dollar Menu and how well it brings in customers. And it seems that even though many people go to McDonald’s for the low price, they don’t always buy from that section of the menu.

Price increase?

I’m getting as many calls from operators wanting to raise prices even in a down economy. Most are saying that their prices have gone up significantly in the past few months, and even though foot traffic is down a little, they’re feeling pressure to take prices up. My advice is, if you can wait a little while for the economy to rebound, great. And if you can’t, use a strategic process for taking prices up.

Date

February 7, 2008

Category

Business, Menu Design, Menu Design Engineering, Restaurant Marketing