STUDY: Consumer Use of Deals at Restaurants Jumps 8% in Q1
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.
“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.
