Restaurant loyalty program points and rewards redemption increased by 26% in Q1, according to market research by Circana, formerly IRI and The NPD Group.
Lingering inflation and higher food prices in Q1 had many foodservice consumers looking for a deal. Customer visits to restaurants and retail foodservice outlets that took advantage of a deal rose by 8% in the quarter ending March compared to a year ago. The increase in deal visits helped to grow total commercial foodservice visits by 1% over a year ago, a traffic gain after four consecutive quarters of flat or declining growth.
- 63% of Gen Z consumers are willing to share personal info with restaurants in exchange for more frequent or personalized offers.
“Last year, deal traffic was flat as rising costs deterred operators from offering deals, and the deals offered weren’t a value from a consumer perspective,” says David Portalatin, Circana food industry advisor and author of Eating Patterns in America. “Although inflation is now moderating, food prices are up 7% from a year ago, and consumers are looking for deals that will offset higher prices. Operators are using deals to drive more traffic.”
Let's Make a Deal
Although 73% of all foodservice visits are not on a deal, those visits were flat in the quarter compared to the visits on a deal growth. Buy some, get some, and coupon deals were among the most popular deal types, growing 13% and 18%, respectively, compared to a year ago. Discounted price deals increased by 8% and daily specials by 6%. Combined item specials declined.
Most of these deals (84%) were used at quick service restaurants (QSRs), corresponding with the fact that QSR visits represent most of the total foodservice traffic. Visits to QSRs increased by 2% and deal visits by 7% in the quarter over last year. Full service restaurant (FSR) traffic declined by 1% in the period, but visits on a deal were up by 4%, reports Circana.
Loyalty programs were also a source of deals and rewards during the quarter. About a quarter of all restaurant visits use a loyalty reward program, earning and redeeming points. Loyalty rewards and points redeemed at restaurants during the first quarter increased by 26% compared to the same quarter a year ago. Breakfast and A.M. snack periods are the most popular dayparts for loyalty points and reward redemption.