Consumer Spending at Quick Serve Restaurants May Prompt Marketing Change
Conventional wisdom indicates that consumers traded down when eating out during the economic contraction. However, that wisdom hasn’t held true for all consumer types and restaurants. Consider the case of the 18–34-year old demographic which historically has been a gold mine for quick serve restaurants. Who knew that this group has seriously decreased its frequency of quick service restaurant visits? According to Sandelman & Associates statistics, the number of monthly visits made by consumers in this age group changed as follows:
- 2006: 19 visits
- 2007: 15 visits
- 2008: 14 visits
- 2009: 13 visits
One quick serve chain enjoyed enviable growth prior to the recession by specifically targeting super-fans. Burger King made it a point to attract younger demographics with irreverent advertising. As the recession drags on and high unemployment rates endure, critics claim that the chain’s marketing focus on this narrow demographic niche is to blame for declining sales.
Writing for the Wall Street Journal, Julie Jargon says that other trends such as healthier eating may also be contributing to slower sales. An NPD analyst noted out that the 18–34-year old group has been eating more at fast casual outlets. It doesn't help that Burger King’s chief rival, McDonald’s, seems to be faring better despite tighter household finances throughout the country.
It is situations like this that prompt C‑level executives to make big changes ranging from menu offerings to marketing programs. To date, Burger King has begun promoting value meals and thus generating protests from some of its franchisees. If the recession drags on, more quick serve restaurants may begin to offer and market items that appeal to a wider demographic group in order to preserve profitability.[Source: Jargon, Julie. As Sales Drop, Burger King Draws Critics for Courting Super Fans, Wall Street Journal, 2.1.10]