Fast food promotion tactics defend against rising costs
Tactics such as offering more specials, meal deals, and free delivery have surged.
The significance of promotions in the fast-food industry is increasing as they play a key role in stabilising prices, fostering customer loyalty, and attracting new customers. Analysing over 100 fast food chains in the UK, Meaningful Vision's latest report highlights the diversity of promotional tactics across the industry.
Number of Promotions
The fast-food industry has witnessed a significant surge in promotions over the last 12 months.
According to Meaningful Vision's data, promotions increased by 15% in 2023 compared to the previous year.
Specifically, the number of promotions run by restaurants increased by 16%, whilst promotions offered by delivery aggregators remained unchanged.
Meaningful Vision’s data shows that the number of promotions linked to the top 100 fast-food chains totalled more than 5,000 in 2023. In January 2024, this growth rate further accelerated, with promotional activities increasing by 22%.
Popular Promotion Types
Price promotions dominate the sector, accounting for 84% of all promotional activities in-store, and 67% of delivery promotions.
Notably, in a concerted effort to attract more customers, delivery aggregators have increased the percentage of free deliveries, from 16% in 2022 to 19% in 2023. This is especially significant considering that delivery prices are up to 20% higher than in-store prices, even before factoring in transport costs.
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The special price offer is the favoured tactic amongst price promotions and grew in importance throughout 2023, rising from 64% to 71% in restaurants, and from 21% to 23% for delivery. Special price offers work for a limited time and provide good value for money, helping to retain existing customers and attract new ones, especially during periods of price growth as currently experienced by the industry.
Campaigns offering a percentage discount are the second most popular option on the market, particularly for delivery, rising from 35% in 2022 to 40% in 2023. In restaurants, it remained at around 10% showing little to no change throughout the period under review.
Absolute discounting (as measured in £’s as opposed to a %) takes 3rd place with a significantly smaller share than price promotions or special prices. Meaningful Vision’s data reveals a slight decline in the popularity of this type of promotional activity, from 3% in restaurants during 2022, to 2% in 2023.
The average discount offered by promotions in 2023 was around 25%, decreasing slightly from the previous year and indicating a strategic effort to offset the surge in prices and maintain affordability for customers.
Free or extra products accounted for 15% of all promotions across all channels and remained stable at this rate throughout 2023.
Product Focus
Meal deals continue to reign supreme as the primary focus of promotional offerings, representing 41% of all product-related promotions and 48% of all special price offers in 2023. The share of meal deals in promotional offerings rose to 15% compared to individual products in 2023.
Pizza meal deals have emerged as a popular choice, catering to group orders, and offering greater perceived value for customers. Pizza is the second most popular product under promotions, accounting for more than 30% of various offers. With the inherent shareability of pizzas, these meal deals provide an ideal solution for families or gatherings. Customers are enticed by the notion of receiving more for their money, aligning with the desire among many people to stretch their budget amidst rising living costs.
“The growth of meal deals is a response by fast food operators to the economic concerns of consumers. With the rising cost of living, increasingly consumers are seeking ways to stretch their budgets. Meal combos typically offer a better value proposition than purchasing individual items separately, especially when they are offered at a discounted price when compared with buying each item separately," Maria Vanifatova, CEO of Meaningful Vision, said
"In a competitive market, offering appealing meal combos can differentiate a brand from its competitors and attract customers looking for value-driven options. By continuously innovating and updating their combo offerings, businesses can stay relevant and capture market share."
Importance of Tracking Competitors' Promotions
Keeping track of competitors’ promotional activities remains crucial for fast-food places, through closely monitoring competing strategies, restaurants can adjust their own promotions to offer compelling deals and gain a competitive edge over rivals.
Meaningful Vision’s data analytics platform provides unique and valuable intelligence to inform decision-making, helping clients to increase their market share and retain existing customers.
As fast-food promotional strategies evolve in response to economic challenges and changing consumer preferences, leveraging Meaningful Vision’s insights allows restaurants to mitigate the problem of rising prices and remain competitive in the ever-changing landscape of the fast-food industry.
