Industry Trends May 2021
RMS remains committed to providing our industry with insights that will guide us into and through “new,” “next” and better.
US Restaurant Trends
We continue to closely monitor pricing across the QSR and TSR sectors in the US and internationally. During the first months of the pandemic, QSR (Limited Service) prices increased significantly more than TSR (Full Service) prices in the US (see chart below). It’s now TSR’s turn. QSR pricing has stabilized at just over 6%, while TSR saw increases steepen starting in March 2021, when restrictions eased and consumers returned to dining out. As labor and commodity prices increase and supply shortages continue, we will keep a close eye on pricing averages and, more importantly, how consumers react.
The Heat Is On
As more people are vaccinated and restrictions are eased, consumers are eager to return to dining out. While the restrictions of the past year may be lifting, the pressures on operators, franchisees and brands are not. Food and labor costs are rising. Supply chain shortages restrict opportunity. Health and safety protocols add costs and traffic patterns are shifting. All these factors weigh heavily on operators, and we are starting to see more and more brands taking price to address some of these profitability pressures.
Here, our COO Mark Kuperman shares 5 tips for brands to consider before taking price to avoid “sticker shock” that might lead to significant unprofitable changes in customer purchase behavior. For more details on pricing and the main questions we are getting from our clients, make sure to take a look at our Consulting Corner below:
- Be Pro-Active vs. Reactive.
- Less is more. Price less, more often.
- No blanket pricing strategy. Create a personalized pricing strategy.
- Not all stores are equal. Understand what drives your individual stores and leverage insights to your advantage.
- Do not underestimate your Satisfaction Scores.
Your top restaurant pricing questions answered
While customers are eager to return to dine-in, operators are dealing with minimum wage pressures, labor shortages and increasing commodity prices. While your gut instinct might be to increase prices, it is now more important than ever to be strategic about your pricing strategy. The wrong move could potentially turn customers away. RMS COO Mark Kuperman addresses our client’s top restaurant pricing questions and how to best create a strategy that leads to success.
The Restaurant Recovery Kicks Into Gear
As vaccines increase daily and restrictions loosen, customers are coming back to restaurants and just in time for the summer. But what does this mean for the future of restaurants? QSR Magazine explores how operators can meet changing demand featuring RMS consumer insights.