Meal deals continue to deliver great value, in new ways: analyst

Deals will be instrumental both for operators to communicate value.

With the majority of consumers having to reduce their discretionary spend amidst the current cost-of-living crisis, deals will be instrumental both for operators to communicate value and for providing consumers accessibility to eating out throughout 2023, a report by analyst Shannon Goldsmith said.

“We last looked at meal deals in detail in 2021 in this report. Since then, the meal deal market has continued to evolve at pace, with developments such as price changes, the introduction of tiered deals, and product innovation,” Goldsmith said.

Here are several takeaways from the report: 

1. Meal deals continue to deliver great value, in new ways

Our most important trend for both consumers and industry this year is the new value equation, with operators and retailers looking to deliver value to customers in new ways as their household finances are stretched further. Meal deals have always delivered great value but this has been stepped up a level.

Retailers are offering affordable premiumisation with tiered deals to encourage customers to trade up to a more premium main. Customers cutting back on the frequency of buying food-to-go may be encouraged by the trade-up at minimal extra cost as an affordable treat, whilst retailers can benefit from adding additional items to the range whilst maintaining profitability.

2. Deals give customers reason to visit operators, and recreate experiences at home with retailers

Meal deals are also a large part of our reinventing experiences trend, particularly in the evening mission with retailer deals.

For those cutting back on eating out, the retail dine-in offer for the evening mission has reached a new level recently and is becoming a clear competitor to food service. Clear price points from retailers, targeting a variety of occasions – such as family dine-in, date night, and Friday night take-away – will appeal to those looking to recreate an evening out at a much lower cost.

In food-to-go, operators can leverage deals to give customers more of a reason to visit. Customers will need extra encouragement to spend on food-to-go this year as they try to cut back overall, but limited-time offers (LTOs) and deals will help give them a reason to visit and help them justify their spending.

3. The digital opportunity isn’t being leveraged by retailers, with food service operators winning here

Whilst the digital channel has evolved rapidly since 2020 with the rise of quick commerce and food service delivery, retailers aren’t offering their lunchtime deals on these platforms. Our ShopperVista research last year found that 20% of quick commerce orders and 10% of food service delivery orders were for food-to-go, so there is clearly demand for such deals on these channels.

There are barriers here for retailers – including minimum spend thresholds and having less variety on delivery channels – but they will lose out to food service operators, across both the lunchtime and evening missions.

Operators, on the other hand, are offering a variety of deals and bundles via delivery aggregators, helping them to appeal to all occasions, and deliver value with a fixed price point.

4. There are huge missed opportunities in meal deals

Across food service and retail, there are more opportunities to take advantage of. Restaurant and pub sectors have historically been great at providing kids deals and family bundles, but retailers can increase their presence here to cater for family occasions. Health is another area to improve in, particularly in children’s deals and in food-to-go, as customers look to industry to provide them with more healthy options and take some of the pressure off of having to make these choices themselves.