Deals’ appeal on the wane, NPD says

Combo meals and dollar/value menus that enticed consumers to visit restaurants during the height of the recession no longer serve as an impetus for driving traffic growth, according to the NPD Group, a market research company.

For the year ending August 2012, nondeal restaurant visits increased by 1 percent in each of the last two years. Conversely, deal-driven visits declined during the same time frame. This is a reversal from three years ago when consumer perceived deals were up 3 percent for three years in a row and nondeal visits were trending down.

Driving the fall off in deal-related traffic is a decline in combined item specials and dollar/value menus, each of which represents about 20 percent of deal traffic, according to NPD’s CREST, which tracks the foodservice industry based on consumer reporting of more than 400,000 visits to foodservice outlets a year.  While the total number of combo meals ordered is up, the percent of consumers indicating that they ordered a combo meal at a special price declined, possibly indicating that consumers no longer perceive combo meals to be a deal, or view them as the standard way to order a full meal. Coupons, discounted prices and senior citizen deals are, however, up, NPD finds.

“In 2008 when economic concerns caused many consumers to stop some of their discretionary restaurant visits, many restaurant operators turned to offering consumers more deals to drive traffic,” says Bonnie Riggs, NPD’s restaurant industry analyst. “As has been historically the case, when deals are in the marketplace for an extended period of time, consumers tend to expect them or see them as everyday price and not as a deal. What should restaurant operators do? Examine their value proposition, not just in terms of prices but in quality and service; leverage the convenience factor of restaurants; and offer variety, all three of which consumers have consistently told us are important to them.”