In yesterday’s post I talked about the new reality facing restaurants, namely, the consumer expectation of great value. This doesn’t appear to be changing despite an uptick in consumer spending. A number of voices in the food service industry have been advising restaurants to provide value to their customers in order to survive these turbulent times, and many have been listening. The result has been prix fixe meals, deep discounting, and any other method to lure customers looking to save a buck.
But what does “value” really mean? The obvious answer is great food and service for a great price. Well, duh. Everybody has slashed their prices or discounted in some way. Not everybody has survived. So what’s the difference between the guy who makes it and the guy who’s left behind?
A look at the National Restaurant Association’s (NRA) hot trends for 2010 provides some insight into what customers are looking for when they say “value.” Granted, this trends report surveys chefs, not restaurant patrons, but one can safely assume chefs are following the trends that increase their sales and therefore these views are reflecting customer expectations.
The interesting thing about the NRA’s top 10 trends is that 5 out of 10 deal with local sourcing and sustainability. “Green” values are becoming a permanent fixture in our culture, and successful restaurants are figuring out ways to make their operations source locally and sustainably.
The perception that a restaurant has a reputable, “green” operation adds a value that is a little more intangible, but definitely important, in the customer’s mind. Just ask Chipotle how in the world they get away with selling an $8 burrito in a fast casual environment. Customers recognize the value of their green practices and locally sourced ingredients. There are hundreds of ways to make your restaurant more green, and advertising your practices to your customers add value.
Another top restaurant trend is portion sizes. Reduced portion sizes allow customers to spend less or pick and choose more than one dish. This is also a hot trend because the perceived value for the customer is that they have options, and not all of them require a lot of money.
There has been a lot of discussion about whether restaurants can sustain the price reductions everyone has rolled out over the last year. The truth is, the value customers find in the restaurants they choose to patronize has to do with much more than great prices. Prices just happen to be the most obvious factor.
Putting together a complete value package that includes a great atmosphere, top notch service, good prices, a quality menu with good choices, and a green operation that sources locally whenever it can takes a lot of work and even more smart marketing.
Restaurants that have a complete package are the ones who win the value competition. Those that focus on price are bound to fail.