I was reminded over the weekend during the Wisconsin, Ohio State football game by one the nations largest pizza manufactures sales of both frozen and fresh prepared pizza are booming in non-traditional channels. That restaurants brands and or product positioning for restaurants is more important than a temporary increase in product or brand advertising.
Repeatedly we have seen company after company in the restaurant sector lower prices and advertise the Hell out of lower prices; garnering a short term reversal of sales trends. Then telling shareholders we are on the right track, justifying the ad spend and while crediting pseudo tweaks in new product or service changes. When in fact nothing but dollars spent on advertising really went up and sales were only slightly better than prior year.
Industry professionals understand that the consumer is dynamic not static. Lowering the price while cost are shrinking is fine. However now that commodity prices are back on the rise the short term gain may become a liability. The companies that raise prices first will lose market share to those in a better position too maintain pricing ala the multi-nationals.
Daniel Smith in his article The Ultimate Food Fight addressed many of these issues. More importantly he pointed out that restaurants are losing market share to grocery stores and convenience stores that have research the customer and repositioned. Smith noted that “The grocery store is now almost accounting for half of all pizza consumption.” Here is a link to that article:
Developing strategy that integrates both the brand and new products while repositioning too be top of mind in consumer relevance requires more than shotgun tactics. There is a reason Grocery stores, Drug stores Dollar stores and C-stores are entering the ready-to-eat ready-to-heat prepared food grocerant niche. Restaurateurs have opened the door.
Outside eyes can deliver top line sales and bottom line profits. Invite Foodservice Solutions® to provide brand and product positioning assistance or a grocerant program assessment. Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche for more on Steven A. Johnson and Foodservice Solutions® visit http://www.linkedin.com/in/grocerant or twitter.com/grocerant