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newsletternewsletter 314
Fast Food Restaurants Feeling the Recession Fast Food Restaurants Feeling the Recession The recession requires all retail stores and restaurants to think about changes. Small businesses always need to stay one step ahead of their customers. Being stagnant doesn’t work. You can’t stay in the back office and wait for your next customer to walk in. Small businesses must constantly stay ahead of the curve. That being said, let’s look at Burger King. Yes. Burger King is a fast food restaurant, but it offers lessons for any type of restaurant or retail store. Burger King sales were up by 1% last quarter (compared to the equivalent quarter of the past year). Only being up by 1% caused Burger King stock to plunge by 20%. In 1975, consumers spent 37% of their food money on restaurants. Last year, consumers spent 48% of their food spending on restaurants. McDonald’s generates 25% of revenues from breakfast and about 40% of its profits from breakfast. Here’s the problem. As unemployment rises, fewer people are eating breakfast on the way to work. That’s not good for McDonald’s or Burger King. The problem with Burger King is that they are losing the breakfast crowd to McDonald’s. Burger King generates about 13% of its revenues from breakfast (about half of McDonald’s). McDonald’s and Duncan Donuts have extended their breakfast menus. Both companies have done a great job at promoting their coffee. You can get a better cup of coffee at McDonald’s or Duncan Donuts that you can get at Starbucks and at half the price. I don’t drink coffee and don’t know if the coffee is better or not, but millions of people believe it. Burger King has remained stagnant. It has no “game” and is losing the food wars. ...and if I haven’t hit hard enough at Burger King, there is a lot of controversy over Burger King’s new SpongeBob commercial. Many parents believe that the commercial is inappropriate. You can read more about it (and see the commercial) at:
http://www.nj.com/parenting/maria_andreu/ As for McDonald’s, they are coming out with a new $4 Angus Burger. The new burger is a higher end, more profitable burger for McDonald’s. Will it work? In our recession, people are moving from eating out at fine restaurants and going to McDonald’s. That is, people are cutting down on food spending. They’re not all going to McDonald’s. What is important is that all retailers and restaurant owners need to take the economy and the recession into account. Don’t stay and wait for the next customer to come in. Give your business some bling (flash). Thrifty is the New Frugal “Consumers are switching from 'conspicuous' to 'conscious' consumption, according to investment strategist Edward Kerschner.” Economists believe that we have reached or are approaching the bottom. Consumer spending should start rising slightly. According to the Thrift is the New Frugal, it’s not about price. It’s about value. Consumers are willing to spend money if they can see the value. For retailers and restaurants, that’s a real fine line. Discounting the price alone is not going to give you the upper hand. You need to promote the value of your products. This switch also travels down to your employees. They really need to know about the products that you are selling. The same customers who won’t pay $14.95 for a steak dinner will pay $15.95 for a Black Angus steak dinner. You may not want to pay $39.95 for an oil change, but you may pay $39.95 for an oil change that includes a tire safety check and complete interior vacuuming and cleaning. Add a written tire report showing the forecasted life of the tires and you have added plenty of value to that $39.95 oil change. To read the entire article appearing in Fortune go to:
http://money.cnn.com/2009/04/20/pf/ Marketing with Avery Business Cards Your customers are your best customers. Your best customers are you present customers. Those people who have already walked into your retail store or restaurant are your best customers. I’ve always believed that it’s best to spend most of your advertising dollars on your current customers as opposed to spending money on newspaper ads, television ads, or coop mailers. For about a penny or two each, you can create a great advertising campaign for your present customers. Using Avery two-sided printable business cards and the free Avery software, you can print two-sided business card advertisements. One side of your business card can contain your standard name, address, phone number, email address, and web address. Use the other side to get customers back into your store. Have your employees give a card to each person that enters the store (or perhaps to customers leaving your store). Here are some ideas: 10% off on all merchandise on Wednesday, April 29th. FREE McDonald’s Coffee Coupon with this card next Thursday, April 30th. Own a clothing store? Have a fashion consultant on staff every Tuesday. If Monday is a slow gasoline sales day, offer a FREE newspaper with every fill up. Have someone in every Wednesday that can shine or clean shoes and boots. People will even pay!!! Do it for a charity. For more information on Avery Business Cards, go to:
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