When restaurants are facing difficulties driven by consumer concerns—namely economic concerns—tackling the challenge becomes the delicate balance of reorganizing for profit while still caring for the customer.
For example, there are obvious downward trends in alcohol sales in restaurants. Some of this is attributed to Gen Z, drinking less as a generation. The response here is to find an opportunity that replaces alcohol—like mocktails or premium dessert drinks, like “bespoke” shakes.
However, recent decreasing sales are more than just a particular age group drinking less. Prices are on the rise everywhere, and consumers are wise to it. Restaurants in order to survive must make menu adjustments, but if the prices creep too far up, the customers begin foregoing dining out. This has been especially true of customers buying alcoholic beverages as the cost of drinks continues to increase.
“[Customers are] already skeptical of alcohol to begin with, and they think prices for drinks have gotten too expensive,” writes Jonathan Maze, editor-in-chief of Restaurant Business, for Nation’s Restaurant News (NRN) recently.
“Adult beverages are lagging behind. Sales of drinks at restaurants and bars declined 0.8% last year, according to Technomic. And 31% of operators said they had ‘severe declines’ in alcohol sales last year.” Maze attributes this to the current economic climate, with the rapidly increasing gas prices front-of-mind for most consumers.
But if it’s an economic issue, not a lifestyle one, the solution is something other than a specialty zero-proof beverage menu or dessert add-ons. Meeting customers where they are looks like providing adult beverages at an acceptable price point and giving guests the experience they want to have when dining out. Of course, the solution also must take operations, costs, budgets into consideration.
“Promotions can work. Nearly two-thirds of consumers—and nearly three quarters of Millennial consumers—say in surveys that a discount on an alcoholic drink is important to their restaurant decision. That means a drink special can drive traffic from consumers who order full meals,” says Maze based on data from Technomic. “The most common promotions at restaurants include daily drink deals, discounts based on time of day, limited-time offers of drinks without a discount and special events with a featured drink. For instance, a two-for-one special or a holiday-themed drink.”
Drink promotions signal to customers that they can have the full dining experience without taking on considerable higher cost, meaning that they’ll not forgo a meal out. For example, Taco Tuesdays with discounted margaritas will draw crowds that might have thought a weekly taco night was something they had to give up.
Richard Weil, owner and principal of National Restaurant Consultants notes, “Attracting and retaining customers is the end game. Training current and new guests to make a dining decision based on discounting is not advised long-term. But creating a reason for guests to dine out as well as selecting your specific restaurant creates the win.”