Restaurant Marketing: Offer a Cost Advantage as Grocery Inflation Climbs

Consumers are facing pressure from multiple points, and the current economy is shifting their behavior, which presents a restaurant marketing opportunity.

Inflation was 8.5% in July and continues to outpace wage growth.  During this period, restaurants dipped slightly from 7.7% to 7.6%, while Grocery continued to climb at 13.1%. Gasoline is the highest increase consumers are facing at 44.0%, which is a decrease from 59.9% in June.

Spending is down, and consumers say dining out is one way to compensate for rising prices, the economy in general, and high gas prices.

Brand preference becomes expendable when a greater perceived value is available – from ANOTHER BRAND. Brands who understand the NEW CONSUMER VALUE EQUATION can generate trial, create preference, and steal share.

Restaurants continue to have a cost advantage over grocery stores with lower inflation increases.  When the gap widens and restaurant inflation is lower, restaurants typically see a rise in sales when the manager of the household budget determines, “It is cheaper to eat out!”  The gap increased to 5.5 points in July.  Grocery went from 12.2% to 13.1% inflation while restaurants dropped one-tenth from 7.7 to 7.6%

However, inflation is hitting pocketbooks hard, and consumers are looking for better prices (52% want more deals and value).

Check out our case studies below to see how restaurants have leveraged multi-channel campaigns anchored by direct mail to increase market share and ROI. For more restaurant marketing strategy and insights, visit our Restaurant Resources page, and download our Restaurant Marketing eBook. Reach out today to plan your strategy!

Sources: Bureau of Labor Statistics July 2022 CPI report; Prosper Insights & Analytics July 2022

 

Read Our Case Studies to Learn How Mspark Helps Restaurants Acquire Customers and Increase Return on Advertising Dollars

Fast Casual Asian Restaurant

Objective

A local Asian restaurant with 4 locations in Texas needed a cost-effective marketing program that would increase average ticket sales and drive customer traffic.

Our Approach

  • Identified & targeted key ZIP Codes surrounding 2 locations
  • Utilized a targeted insert to engage 39,000+ households
  • Created an effective ad with attractive offers to drive response

OFFERS: 

  • $3 OFF with purchase of $15
  • $5 OFF with purchase of $25
  • $6 Student Meals
  • $20 OFF Catering of $100 or More
  • Kids Eat Free Every Thursday

The Results

$4,000

sales increase for one location

60%

sales increase during the first week for the second location

2

additional stores began using the mailbox to drive traffic

National Quick Serve Restaurant

Objective

Objective: A national restaurant chain was looking to encourage franchise participation after a successful advertising partnership with Mspark.

Our Approach

  • Partnered with corporate to provide an affordable advertising solution
  • Encouraged franchise participation with a program for 2 consecutive in-home dates
  • Targeted the best households surrounding each restaurant location using Wraps and Targeted Inserts

The Results

$2,013

Average margin generated from one mailing.

$7.40

Gross margin generated by each coupon was $4.75 - $7.40

Quick Serve Restaurant

Objective

A regional quick serve restaurant (QSR) turned to shared mail to generate awareness in the marketplace and drive customer traffic to their locations.

Our Approach

  • Saturate the market reaching 43,000 household surrounding their location​ 
  • Utilize strong coupon offers to drive traffic and sales​ 
  • Consistently mailed over a 5-month period using a cost-effective wrap solution

The Results

162

average redemptions each month

$6,257

return on investment

Regional Quick Serve Restaurant

Objective

A regional QSR was looking to target households and drive traffic to four of their regional locations across multiple months.

Our Approach

  • Identified the client’s key geography to build out both direct mail and digital components of the campaign utilizing Targeted Inserts + Addressable Geofencing (AGF) Digital Display Ads.
  • For digital, we targeted the full direct mail list with about a 98% match rate.
  • The direct mail pieces dropped at the end of each campaign month. 18 digital impressions targeting the same households deployed over the course of 10 days, starting 1-2 days before the direct mail piece hit the mailbox.
  • Campaign results were tracked by monitoring website traffic, as well as foot traffic attribution at all 4 locations.

The Results

360,215

Impressions

0.20%

CTR, 2x greater than the industry average

715

Website visits and 117 foot-traffic conversions

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