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Thursday
May232019

Menu & Promotions

Report Highlights
  • RR’s Menu & Promotions analysis provides data for 56 chains (33 QSR and 23 FSR) including: (1) a 5-year history of total menu items (2014 – 2018); (2) promotional mix by quarter; (3) new product intros; (4) average check; (5) sales composition; (6) menu category mix; and (7) monthly new product calendar.
  • After years of menu optimization in order to simplify operations, speed-up service and improve food quality, average menu size was relatively unchanged from last year (-1.4% for QSR and +0.2% for FSR) which suggests the industry has finally found a point of equilibrium as the brands balance providing ample menu variety with keeping menu complexity in check. Innovation is currently focused on customization options, new digital ordering platforms and delivery access.
  • New product introductions declined (-4.6% for QSR and -4.1% for FSR) due to a continued focus on value and efforts to reduce operational complexity. Notably, increases in the QSR value promotional mix was negatively correlated (-55%) to quarterly comps over the last couple of years. This means that a QSR value focus has been detrimental to sales, suggesting deal fatigue. Not surprisingly, increases in the FSR value promotional mix helped drive comp growth (positive correlation of almost +21%). Rather, QSR sales have benefit from premium promotions and new product news. This is the inverse for FSR where value is all that matters after years of steady price increases.
  • Average check growth accelerated for QSR (+3.2%) but moderated for FSR (+1.9%). The Food at Home CPI turned slightly positive (+0.4%) for the first time in 2 years, narrowing the price gap between restaurants and grocery stores.
  • Although delivery still represents a very small sales mix, it is growing rapidly as a result of 3rd party aggregators.

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