Customers may want lower restaurant prices these days, but they don’t want to feel cheated by the menu items operators are giving them for those lower prices.
That’s one of the conclusions of a survey of 1,000 consumers from the Consumer and Retail Group with Alvarez & Marsal. More than half of consumers, 56%, said that “good value” means great-tasting food and not just a low price.
And 46% of consumers said that they’ve stopped visiting a fast-food restaurant because the quality went downhill.
That said, deals are still crucial: 52% said that deals are the top motivator to try a new menu item, meaning that value-led promotions can still get customers in the door.
“The value equation has changed with consumers today,” said Jen Meyers, managing director with Alvarez & Marsal’s AI-powered digital agency, A&MPLIFY, and a former marketing executive with Arby’s and Jack in the Box. “They’re looking more for quality, and is it worth the money versus looking for discounts. And I think that’s going to be really interesting as we see the value wars play out.”
The shift in consumer perspectives on value can help explain some of the oddities of the current market.
Price-based promotions have been commonplace over the past 18 months, but they haven’t always resonated with consumers the way they have in the past. Yet chains like Chili’s and Applebee’s have been able to win customers with deals that, while moderately more expensive than fast food, offers what people think is a better value.
Driving much of the change? Gen Z consumers, the ones who have been flocking to those casual-dining chains. “Younger generations are not willing to feel restricted, not willing to make tradeoffs,” Meyers said. “And when they see that price point, you can’t give them a smaller quantity or lower quality for those types of products.
“I think that’s a huge change.”
Modular meals
That’s not the only change in the current environment. Consumers are less likely to eat just three big meals a day.
Fifty-eight percent of consumers said that grabbing a quick snack or small bite is a key reason for their visits. That suggests they’re eating more, smaller meals over the course of the day.
That could help fuel snacking dayparts. It’s also a big driver of the booming beverage business.
“They want modularity,” Meyers said. “They want more innovative beverages or snack size portions that they can create a mini-meal, a bento box concept, and they want that available throughout the day.”
Consumers get a lot of takeout, too. The survey found that 83% of consumers who visit fast-food restaurants three to five times per month do so through one of the takeout formats—drive-thrus, inside pickup or delivery. “Restaurants need to think about how they flex to the consumers, who are more on-the-go than ever before, and not just in the traditional drive-thru sense,” Meyers said.
Healthy indulgence
Another key point from the study is consumers’ dual demands. Health is not a major driver of fast-food visits. Only one in five consumers choose a fast-food restaurant because it has healthy options.
Customers are looking for “balance.” About 70% of consumers in the survey value both healthier options and comforting food when they go out to eat, which could pressure operators looking to cater to certain groups.
How consumers view health keeps changing. More than 45% of consumers in the survey said that food cooked in a healthier way is crucial, while 40% cited “cleaner ingredients.” By comparison, just 30% cited fewer calories per serving.
While consumers of different ages may have different views on what’s healthy, they all agree that it should taste good.
“Consumers want it all,” Meyers said, “and preferably in the same meal.”
Nostalgia and collaborations
The survey also provides some clues about what works on the marketing front.
Nostalgia remains a big deal. Two in three consumers rate familiar comforts or memories of good times as extremely important, according to the study. That helps explain the popularity of promotions such as McDonald’s adult-focused “Happy Meals,” such as the Grinch Meal that sold out in a week in December.
Collaborations also work: Forty-one percent of consumers are drawn to collaborations between fast-food restaurants and other brands, which helps explain the popularity of Burger King’s Spongebob Movie Menu.
Scarcity works, too, as 40% of consumers are most likely to try a new item if it’s available for a short time. So those limited-supply promotions.
“Consumers are more likely to try something if it’s a twist on the familiar,” Meyers said. She cited items like the Pumpkin Spice Latte at Starbucks, which combines two things people like, the latte and pumpkin spice, or Taco Bell’s Doritos Locos tacos.