“Economic downturns are not the end of the world,” says Correll, founder of Correll Consulting. “The economy is a cyclical animal; we just happen to be in an unusually steep downtrend, but it will bottom out and go up again. Keep a positive outlook and view the long term; try not to take a ‘the sky is falling’ mentality, because you can sometimes do things that hurt you in the long run.”
Correll suggests examining the situation and people’s priorities. Once you know what people want during a recession, you can market accordingly. “When you look at the downside of a recession, you mentally paralyze yourself, and it can cause a panic,” he says. “Necessity is the mother of invention, so try a new product or product line; you don’t need to cut back—just change your marketing approach. You can only cut back so much before it starts hurting you.”
“I’m not a fan of increasing prices during a time of recession,” says Mohammed, a pricing strategist at Culture of Profit. “Offer customers good/better/best options, and you automatically give them the choice of what to pay.”
Mohammed advises operators to retain current price-sensitive customers and attract new price-sensitive customers by capturing those who are “trading away” from spending by initiating common techniques such as coupons, loyalty cards and discounts at off-peak times. “For customers who say that they love pizza but it’s getting too expensive, try creating a pizza kit that allows them to make the pizza at home,” he says. “They’ll still be buying your product instead of frozen, and you’ll keep a customer.”
The biggest opportunity that Mohammed currently sees for pizzeria operators involves capitalizing on consumers who are “trading down” from high-end restaurants. By offering higher-end options at your restaurant such as gourmet pizzas,
Italian pasta nights, free corkage night, etc., you can cater to their desire for a premium product, and your prices will seem affordable. Plus, your current customers may want to try your new menu items, resulting in even more profit!
“Recession or no recession, time well-spent will remain the ultimate goal of the consumer,” says Duke, CEO of Duke Marketing. “Consumers spend a great deal of precious time going out to eat. Therefore, tying a brand to quality time is a concept with huge implications.”
Duke believes that more than anything, you need to provide guests with an experience and show them that a visit to your restaurant is “time well-spent.” She provides the following insights:
Consumers are gravitating more toward experiences than assets and goods. Finding ways to make your restaurant brand “add life to the experience” should
The recent Consumer Pricing
Strategy Report, put out
by foodservice consultants
Technomic, revealed the
following silver lining on
consumer spending:
• Many consumers said they are willing to spend more on “higher-quality” menu items if they include premium ingredients (61% would pay more for premium meat, 41% for premium cheese, and 34% for premium bread).
• Overall, consumers are cutting back more at full-service than at limited-service restaurants (lower-income consumers are cutting back at both).
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