- About today’s value equation, The Elliot Group Chief Brand Officer Sarah Lockyer said: “It’s not just one value equation per brand, it’s the value equation of off-premise, the value equation of dining in, and the value of price and our collective ability to help people celebrate the things that are important to them.”
- The limiting factor is labor, according to Forbes Reporter Alicia Kelso: “Operators are dealing with more volume from more channels, while there is an all-time-high quit rate in the industry. Arguably, from my vantage point, labor is the biggest pain point.”
In the latest installment of the RMS web series “Revenue Stream,” Alicia Kelso, senior contributor for Forbes, speaks with Sarah Lockyer, chief brand officer of The Elliot Group; Ray Blanchette, CEO of TGI Fridays; and RMS’ Francois Acerra. Together, they discuss how to keep customers in the face of record-setting inflation, rising prices and equally high customer expectations, while also retaining talent.
Watch the full conversation for suggestions from the experts about how to prevent customer trade-out, what new skill sets executives need and why inflation is not necessarily a dirty word. Read on for a taste of what the power panel discussed.
Easing the pinch of price increases
Just a few short months ago, diners cited order inaccuracy, wait time and poor service as sources of dissatisfaction. Now, it’s price sensitivities and a feeling of receiving less value. This is understandable, said Acerra, as consumers are hit with inflationary pressures from the grocery store to the gas pump.
The value equation is more than a dollar menu
For most restaurant concepts, the definition of value has changed. It’s more comprehensive due to COVID. Today, value envelops more than a dollar menu; it includes an entirely new level of convenience and service. When stay-at-home orders demanded at-home options, the industry responded with new channels, such as curbside pickup, and by expanding existing delivery channels. The industry expected the return of dine-in to dampen the importance of off-premise channels, yet consumers are enjoying the benefits of both. And their expectations remain high across the board. As Kelso mentioned, “consumers are getting what they want, where they want and when they want it.”
TGI Fridays is tackling the value equation moment by moment and hire by hire. Blanchette explains why getting the moment just right—whether that’s a special occasion or everyday experience—is so key in recessionary economies. A good team ensures a good experience, so maintaining top talent is a priority for his brand. Given the tight labor market and attractive gig economy, many argue that getting labor right would be impossible. Blanchette disagrees: “It’s impossible for those that don’t make it a priority. But we decided to do something different around the employee value proposition because we saw a way to win.”
He went on to share TGI Fridays’ creative approaches, such as sizable vacation reimbursements and daily pay.
What’s gas got to do with it?
Gas prices and inflation in grocery stores are hitting quick-service consumers the hardest. As a result, their discretionary income (and propensity for the drive-thru) are feeling the pinch. According to the panel, menu engineering and close daily attention to balancing the value equation for guests may help avoid trade-out.
The correct equation?
To keep guests coming in the door, Lockyer advised, “It’s not just one value equation per brand. It’s the value equation of off-premise; the value equation of dining in; and the value of price and our collective ability to throw a great party to help people celebrate the things that are important to them.”
To learn more about the latest consumer trends and how we are helping our clients drive profitability, get in touch with our experts.