Actionable Insights From APT's Retail Practice

CSP: 5 Lessons Convenience Retailers Can Learn From Restaurants

August 16th, 2016 | Posted by Katheryn McKee in Labor & Operations | Pricing | Restaurants | Retail - (Comments Off on CSP: 5 Lessons Convenience Retailers Can Learn From Restaurants)

In a recent CSP article, APT SVP Marek Polonski outlines the following five lessons convenience retailers can learn from restaurants as they look to optimize their foodservice strategies:

  1. Run in-market tests to evaluate every new idea
  2. Rethink menus to keep up with new diner preferences
  3. Adjust staffing to optimize foodservice operations, while managing costs
  4. Craft pricing strategies to balance traffic and transaction size
  5. Introduce in-store technologies to create a more personalized experience

Polonski writes, “Winning in foodservice means thinking like the experts. Consider these lessons from restaurants, who have been in the business for years, and you may find the right balance.”

Learn more about how leading restaurants are using in-market experiments to fuel innovation across their business.

Variable Pricing: How will guests respond?

November 11th, 2014 | Posted by MHarper in Pricing - (Comments Off on Variable Pricing: How will guests respond?)

APT SVP Jonathan Marek discusses the trend of variable menu pricing, and its implications for restaurants.

Common Mistakes in Menu Pricing

July 8th, 2014 | Posted by CCorman in Pricing - (Comments Off on Common Mistakes in Menu Pricing)

Getting pricing strategy right may be the most challenging task for restaurant organizations — wrong decisions can lead to guests trading down to lower-priced items, or lost traffic. Similarly, failing to take price where it’s available can leave millions of dollars of profit on the table. In this video, Jonathan Marek – APT SVP and Restaurant Practice Head – discusses common mistakes restaurants make when setting menu prices, and the need for a robust Test & Learn process.

Do daily deals make sense?

September 10th, 2013 | Posted by CCorman in Pricing | Promotions - (Comments Off on Do daily deals make sense?)

We’ve written in the past about the questionable economics of daily deals for restaurants. However, a recent article in QSR Magazine suggests that some operators are still using Groupon and other daily deal sites to encourage new business at some locations. For example, Smashburger recently launched a $6 for $12 deal, meaning that the Denver-based burger chain will receive $3 for the same food that would have normally garnered $12.

Two things about this promotion are worth noting:

  • First, Smashburger is only running this promotion in areas where they have relatively low brand awareness, so it is likely that the chain is driving more incremental visits in those locations than they would have if they launched the promotion chain-wide.
  • Second, Smashburger notes that customers redeeming the deal come in groups and thus have larger overall checks than those customers not redeeming the coupon. While this statistic is seemingly good news, it is difficult to know whether customers redeeming the deal would have had larger checks anyway.

For restaurants with low brand awareness, daily deals have a chance of being profitable by generating incremental trials that may lead to full-priced future visits. But restaurant chain operators need to test these promotions first to understand if redeemed deals are actually generating incremental trips and larger transactions, or if that behavior would have occurred anyway. Fortunately, Smashburger has an opportunity to do such causal analysis since they have only offered the Groupon in some locations.

Optimizing Pricing

June 23rd, 2013 | Posted by CCorman in Pricing - (Comments Off on Optimizing Pricing)

APT President Patrick O’Reilly discusses how restaurants are using in-market testing to optimize pricing by menu item and location.

Should Restaurants Change Prices by the Hour?

September 5th, 2012 | Posted by CCorman in Pricing - (Comments Off on Should Restaurants Change Prices by the Hour?)

Like an empty hotel room or airline seat, a restaurant table without guests is lost revenue. The New York Times recently reported that some restaurants are now introducing variable pricing models to capitalize on changes in demand elasticity by day and by hour. (more…)

Quiznos Dropping Value Items: What should you look out for when you change prices?

July 26th, 2012 | Posted by retailblogadmin in Pricing - (Comments Off on Quiznos Dropping Value Items: What should you look out for when you change prices?)

In a recent strategy shift,  Quiznos has announced that it is dropping its value priced items and focusing its brand on more expensive offerings. This shift towards “tastier foods,” such as prime rib sandwiches, may help to differentiate Quiznos from competitors in the ever-increasing sandwich space, especially as more concepts try to position away from yet another value offer. Still, success will depend on guest response. (more…)

Getting Pricing Right Doesn’t Fit Into Soundbites

June 22nd, 2011 | Posted by retailblogadmin in Pricing - (Comments Off on Getting Pricing Right Doesn’t Fit Into Soundbites)

Operators understand very acutely the effectiveness of price changes – after all, nothing else in the business can impact the bottom-line so directly.

Despite this appreciation for the importance of pricing, the sophistication by which most companies manage prices is woefully inadequate.

Industry pricing “leaders” comment on the problem frequently, revealing “we should remind our guests value isn’t just a function of price,” and “if it’s a $3 price point one day and then it’s all of a sudden $4, that’s not palatable to a consumer. But if it goes up to $3.29, that’s a little bit easier to take.”

If this is the best that the industry has to offer on this subject, then we’re all in a lot of trouble. (more…)