More Restaurants to Promote Combination Meals

Food service operators find themselves in a difficult situation this year. Rising supply costs mean their profit margins are shrinking. And they’ve been heavily promoting discounts to get consumers through the door during the recession. If they discontinue these promotions, consumers are likely to find another place to eat. So restaurants are finding creative ways to promote items while still appealing to consumers.

In the past 6 months or so, consumers seem to be watching their food budgets more closely. According to a Technomic Trend Barometer, here are the percentages of consumers who say they are very or somewhat likely to eat out on a weekend if a restaurant does not offer a dinner deal:

  • July 2010 87%
  • September 2010 82%
  • January 2011 77%

In addition, 32% of surveyed consumers say they will reduce visits to full service restaurants if price hikes are put in place. And if consumers did visit the restaurant, they would cut back on what they were ordering. The most likely item to be skipped would be appetizers: 58% of women and 47% of men would not order them.

Clearly, restaurants are facing a client base that is not as free-​spending as it once was. At the same time, Technomic survey data supplied to American Express Market Briefing shows it is possible for both full service and casual dining formats to attract visitors with combination meals. For example, 80% of consumers agree or agree completely that a sandwich at a full service restaurant should come with fries or another side item included in the listed price. Well over 1/​3rd of consumers say they would order appetizers or desserts if the items were offered as part of a combination meal. This holds true for the fast casual, traditional casual and upscale casual formats.

Analysts note that restaurants can increase sales by offering mix and match entrees and pricing them for a slightly lower amount than it would cost to buy the items separately.  Operators can also target families with children by offering desserts and appetizers as part of combination kids’ meals because parents appreciate the convenience and value of these options.

Look for more restaurants to get creative with pricing and marketing combination meals this year as they attempt to increase market share and profitability.

[Source: The Art of Menu Pricing. American Express Market Briefing. February 2011. Web. 25 Feb. 2011] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.