The Avocado Show’s insights on a successful pricing strategy

Competitive pricing is crucial in balancing value with business sustainability.

When building loyalty, brands need to accept that they need to pay a price, which is what the Avocado Show does to ensure long-term growth for the business. 

This is paramount as UK consumers become more and more aware of how much food costs due to limited discretionary spending. This may mean strategies like communicating value with meal deals or loyalty programmes.

“Strategic pricing adjustments are made to build a loyal customer base, crucial for our restaurants’ success. Accepting some short-term profitability dips, for example, when launching set menus or promotional activities is seen as an investment in long-term sales growth,” Eric Lefebvre, chief development officer at the Avocado Show told QSR Media.

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Founded in the Netherlands in 2017, The Avocado Show is an international franchise brand with in The Netherlands, UK, and Germany. The brand serves what they call Pretty Healthy Food, stunning and delicious dishes made from sustainable avocados.

Offsetting food price inflation by increasing prices can be a double-edged sword. On one hand, operators can maintain profitability; on the other, customers may decide to find value for their money elsewhere.

In a report by Fourth, a firm specialising in inventory management, food price inflation hit 9.1% in Q4 2023. This leaves operators little choice other than to raise their prices by an average of 7.1% to offset costs. This move has still resulted in many businesses struggling to stay afloat, with a large number of closures reported at the very start of this year.

Annually reviewing prices whilst considering industry norms, operational costs, and the competitive landscape is one strategy The Avocado Show uses to be able to keep control of any negative impacts borne out of sudden economic pressures.

“Key factors are impacting the industry, notably operational expenses, the cost of goods, and labour availability and costs. The 2023 Collective Labour Agreement (CLA) wage increase in the Netherlands serves as a prime example. These factors have uniquely impacted various industry channels,” Eric said.

The Avocado Show operates in three different countries as well as different channels. Eric said it is essential to recognise the diverse economic landscapes and customer preferences between these markets.

Eric added that they are in the process of tailoring this approach by location as part of their plans, such as reviewing what different customers from different points of sale like mall locations, high street locations, and the brand’s “ToGo” locations are willing to spend.

“It will allow us to tailor prices to local market conditions, ensuring our offerings are accessible and appropriately valued,” explained Eric. “For instance, in areas with higher living costs, our prices could reflect that, whilst, in more economically diverse regions, we could offer a wider range of pricing tiers to cater to a broader guest base. This tiered approach should not only help in meeting regional demands but also align with our commitment to providing quality food experiences for all our customers.”

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One strategy they came up with is experimenting with different menu formats such as their “Best of The Show” campaign which was a set menu including the brand’s best dishes as well as homemade drinks and cocktails — quite similar to Happy Hour offerings in its London locations.

Eric said they are also exploring meal bundles for delivery as well as introducing entry-level products which guests can customise just to give them a personalised experience.

Another strategy is leveraging the brand’s unique position which is serving high-quality, sustainably sourced avocados in creative and Instagram-worthy presentations. This strategy leans heavily on digital and social media marketing for more impactful brand awareness.

“These platforms, known for their visual appeal, align perfectly with our unique dishes and experiences. We use them for storytelling, promoting our latest creations and news as well as reposting and showcasing our beloved guests,” Eric said.

“We also deeply value loyalty strategy techniques which enable us to build meaningful relationships with our guests. This is one of the pillars we would like to focus on this year with campaigns aimed at increasing repeat visits,” he added.

Amidst all these efforts, Eric said they expect in 2024 a modest price growth in line with the market trends and operational costs. “Competitive pricing will remain crucial, as it’s key to balancing value for our guests with business sustainability, possibly becoming even more important in a consumer-conscious market,” he said.