Inflation Trends

Consumer Trends
As higher costs continue to squeeze margins, menu price hikes are likely, which then poses the question…how will consumers react?

History shows that consumers modify their spending habits in a variety of ways.

Modified Spending Habits
*Trading down to less expensive restaurants
*Ordering fewer items when they visit a restaurant
*Ordering from a value menu or purchasing a snack
*Taking advantage of special promotions in the form of fixed price menus with ‘pick and choose’ options
*Ordering less expensive items
*Taking advantage of price promotions or coupons
*Sharing/splitting a main entrée *Ordering an appetizer instead of an entrée
*Not ordering a beverage
*Not ordering a dessert
*Ordering a burger/sandwich instead of a main entrée

What Can The Operator Do?
*Because consumers have many ways they can manage their spending, the challenge is much more complicated than deciding how much to raise prices.
*Working with their partners, the operator will need to evaluate their entire menu to anticipate how their customers will react and develop programs that reduce trade-down and offer value.