The foodservice industry has had some challenging few years, and the ongoing cost of living crisis has dampened hopes of a swift post COVID-19 recovery. Yet, with summer upon us, optimism is high among foodservice operators hoping to make the best of the terrace season. They will need to deliver on value as German consumers are spending more intentionally, and their expectations are high.
The rising cost of living has increased consumers’ propensity for cost-saving measures that fit their under-pressure budgets, including visiting foodservice less often. 67% of German foodservice users have cut back on eating out or ordering takeaway because of price increases. Some will also be inclined to trade down to cheaper dishes or restaurants, or to order fewer dishes when needing to save.
At the same time, the uncertainty caused by world events has increased consumers’ desire for fun and indulgence in their dining experiences, and sharing these with friends and family after years of restrictions. 67% of German diners eat out to treat themselves, while 40% do so to celebrate life events.
The impact of the cost-of-living crisis will see foodservice operators with strong value propositions perform well. 43% of foodservice users say low-cost menu items are the top factor when choosing a foodservice venue. Applying tiered pricing to offer lower-priced, base menu items – but provide the chance for consumers to add extra items or trade up – can help promote regular participation while avoiding slicing margins too thinly. Snack-sized or smaller portions of indulgent foods can also be promoted as more permissible treats, both in terms of price and health considerations.
Moreover, bundle deals that lowers the costs of specific menu items can also encourage cost-conscious consumers to visit. More personalised targeted promotions, such as offers based on geolocation or previously purchased items, can provide a sense of immediacy to deals and increase their effectiveness in driving sales.
But with eating out becoming more of a special treat as frequency drops, many will be more likely to spend their money on experiences that have an added value beyond price. Brands can boost their value and tempt consumers to eat out with exciting new flavours or cuisines that feed their wanderlust, shareable dishes that enhance experimentation and socialising, or with dishes that cannot be replicated at home.
Foodservice operators can add value in multiple ways to attract consumers who are more mindful in their spending. While price is part of it, providing good service levels and a dining experience that delivers on taste, quality and excitement will be essential.