The economic trend for nearly every restaurant operator in 2022 was to raise prices, with most companies taking mid-single digit-- or sometimes double-digit menu price increases in order to keep pace with inflationary trends. But just as operators need to be careful to not alienate customers by increasing menu prices too much, they also must learn how to balance enticing customers with deals while making sure revenue still grows.
As this period of economic uncertainty continues, there has been an operational trend away from discounting and more toward everyday consumer value—a more complex equation that doesn’t just take price into account, but also quality of food and beverages, uniqueness of menu items, experience, and speed of service. On recent earnings calls, several restaurant executives have mentioned taking a break from discounting in order to improve revenue returns for an industry that’s just lapping the COVID-19 omicron-related downturn from last year, including Bloomin’ Brands, Brinker International, and Restaurant Brands International.
For more on the value movement, we turn to senior editor Joanna Fantozzi.