As the quick-service restaurant (QSR) landscape evolves in 2024, operators face unprecedented challenges and opportunities. Standard indices tend to support claims that restaurant customers have returned to their pre-pandemic behaviors, as evidenced by “stable traffic and higher average checks.” But when Revenue Management Solutions took a closer look at national QSR trends, the data told a different story — one that indicates the industry is in uncharted territory.
In a recent conversation with Mark Kuperman, RMS COO, and Michael Halen, Bloomberg senior restaurant and foodservice analyst and host of the podcast “Choppin’ It Up,” they discussed what operators can do to reach QSR guests who’ve settled into a post-pandemic stance quite different from the idyllic “before times.”
The conversation referenced RMS’ recent study comparing national QSR performance to pre-pandemic levels. As Halen acknowledged, the analysis is unusual in that it provides a more nuanced look than the traditional month-over-month and year-over-year data that most industry studies compare.
To highlight all the invaluable insights discussed in the episode (available here), we’ve split Kuperman’s top takeaways and actionable insights into two parts for a comprehensive guide to QSR success in 2024.
- Understand price advantages relative to the competition. When it comes to the competition, an item-to-item comparison isn’t enough, says Kuperman. It’s important to understand the makeup of checks, not just the overall spend. Instead, operators should be interested in the customer’s total basket: What are they spending at your brand and at the competition?
- Effective strategies distribute price across customer types. Understanding the distribution of who buys which items and how they might be bundled together can help brands avoid overpricing and touching several items on the same check ultimately creating sticker shock and driving customers away. For example, taking price on a burger, chicken sandwich and vegetarian item might be more successful than taking price on a burger, fry and beverage all at once. This requires understanding the total check makeup.
- Get surgical — about everything. New behaviors call for new strategies, and that’s not limited to pricing. Overlook nothing, including hours of operation. Sure, big brands can look across thousands of stores to understand the impact of extended or shortened operating hours, but the right solution for each restaurant likely isn’t the same across the board. However, Kuperman says, by leveraging the “experimental” data available to operators looking to study the impact of different operating hours, brands can discover great opportunities for dialing in on revenue and labor down to the market.
- Make the most of the drive-thru. Drive-thru accounts for two-thirds of all QSR revenue, and as such, every element of the channel should be optimized to improve margins, ease throughput or both.
- Fine-tune your dine-in vs. drive-thru experience. The pandemic trained guests to stay in their cars. Post-pandemic, drive-thru technology and operations advancements are helping keep them there. Recapturing dine-in traffic will require understanding and articulating the extra value the customer can gain from dining in. Is it food, speed of service or price? Brands need to solve for this.
Read part two for more insights
Explore additional actionable insights for QSR operators in 2024. Plus, discover what Kuperman says is the single most important thing restaurant brands can do to find grace with customers when taking price.
Be sure to read part two of this series, where we’ll explore additional actionable insights for QSR operators in 2024. Plus, discover what Kuperman says is the single most important thing restaurant brands can do to find grace with customers when taking price.
When the time comes to capturing market share or leveraging your data and that of your competitors, RMS can help. Our solutions empower you to make informed business decisions that result in higher profit gains. Contact our team today to kickstart your journey to QSR success in 2024.