What makes good value? A savvy consumer knows, it isn’t just a low price. Over the years, as Millennials have become more and more willing to spend more to get more, value trends have shifted for the broader consumer base.
Alicia Kelso writes for Nation’s Restaurant News (NRN) about the shocking McDonald’s experiment that didn’t pan out as expected. “McDonald’s launched its $5 Meal Deal last June to win back low-income consumers who started pulling back their restaurant spending in the beginning of 2024,” her article explains. But ultimately, even after expanding the value menu to include other $1 items, customers still weren’t returning in droves. “The company continued to experience its slowest performance since the pandemic, and despite the McValue Menu launch.”
Kelso compares this to Technomic managing principal Joe Pawlak’s thoughts during an interview at the National Restaurant Association Show in Chicago earlier this year. “When I first started, it was all about price. Now, it’s about consumers’ willingness to pay more, but you’ve got to give them more,” he said. The trick is no longer offering the lowest price, but creating the best value and proving to customers that the value added is worth the extra spend. ““Consumers want value to be worth their time and money,” he said.
Eric Blumenthal, Coca-Cola’s senior vice president of foodservice commercial leadership and growth, agrees. “We push our operator partners more toward the ‘what you get’ side of it,” he said. “When you look at who’s winning today, it’s not the players that have value menus or deals, it’s the ones innovating and ideating on the ‘what you get’ side.” According to Kelso, “Blumenthal recommends a sharpened focus on menu innovation that marries the increasing demands for both healthy and indulgent, as well as greater investments in staffing and training”—two specialties for our restaurant consultants here at National Restaurant Consultants.
Menu engineering is the process of discovery what matters most to customers in terms of offering and how to price those items in a way that makes sense for both the business and the consumer. Using inventory and business analyses alongside careful menu design, restaurant owners can cater to customers’ wants and the hunt for value without dropping their menus to prices that hurt the bottom line. In fact, menu engineering normally benefits profits.
This tactic must be carefully integrated with restaurant operations, particularly customer service. The experience is a huge value maker for most customers. Blumenthal added, “I’m not saying you don’t need to have a hot price point, but you also have to have the things that will keep customers coming back — quality, experience, convenience, did someone smile at me? Customers don’t want to feel transactional when they’re spending 30% more.”
Success in the restaurant industry always stems from a strong focus on the customer experience, followed by sound business practices, informed by market trends—not as emotional responses to them. Richard Weil, principal and owner of National Restaurant Consultants reminds operators, “Value proposition and a call-to-action are basic Marketing 101 tools. We often complicate the process. Considering the success that many chains are experiencing today starts with basic components of not just value, but service, and quality that fulfills the consumers thought processes when making a dining decision.”