Client Successes

RMS' store-specific data enables QSR chain to recover traffic lost to new competitor

Our Client's Challenge

Following a competitor’s entrance to the market place through acquisition, our client began to see traffic drop significantly across all its locations.

The Solution

RMS helped each restaurant location quantify the short and long-term impacts of the new competitor’s restaurants openings. We analyzed store-specific data on guest traffic, profit changes and variations in customer purchase behavior over a 12-month period.

The Result

By quantifying the impact of the disruption, operators were able to define a localized combat strategy.

Our top three key takeaways for the senior management team:

  • The physical distance to competitor restaurants mattered. Being located 500 meters (approx. 546 yards) or 2kms (1.25 miles) away was the difference of customer numbers declining between 12 percent or 5 percent on average
  • On average, the negative impact of the new competitor weaned off after 12 months. This indicated that our client’s experimental customers base returned to their restaurants before the year was over
  • The customer purchasing behavior did change following the arrival of the new market entry. Overall, less premium menu products were purchased. Distance again played a role. Restaurants within 500 meters (approx. 546 yards) of the new competitor saw significant reduction in demand. This effect diminished the further clients were located from the new competitor’s restaurants.

Based on these insights, our client designed targeted marketing, promotion, and pricing strategies for their locations. Slowly but surely, they recovered market share in their sectors.

 
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