Chain Restaurant Customer Counts Down Brand Protectionism Does Not Work

Many legacy chain restaurants in every sector continue to practice brand protectionism and blame uncertainty in the economy, health care, weather on customer migration to lower competitors as a reason that sales are off, profits miss and growth has slowed. Nothing could be further from the truth.

According to the latest monthly MillerPulse survey, same store sales were flat in June as both quick-service and casual-dining concepts struggled to bring customers in the door.  However the big news was year over year customer counts fell 1.9 percent for the month.  That by the way was the worst performance for the restaurant industry since January 2014. 

Consumers are dynamic not static. Consumers have moved on and many restaurant chains continue to practice brand protectionism, obviously comfortable where they were 10 years ago, 15 years ago and some 20 years ago and still are today. That may have worked back in the day.  Clearly it’s not working today.

During the golden era of the restaurant industry 1960 -1995 brand protectionism worked. While the restaurants, flourished the grocery store channel was greatly diminished. The grocery store sector woke up and began experimenting with what I have termed the Grocerant niche.  That is to say they began to test fresh prepared Ready-2-Eat and Heat-N-Eat meals and meal components.  

According to Technomic in its Retailer Meal Solutions (RMS) Consumer Trend Report “consumers are purchasing RMS more often; 84% now purchase RMS at least once a month….  This increase is largely driven by younger consumers aged 18-34, who are increasingly reliant on foodservice in general.”

Packaged Facts estimates that the Ready-2-Eat and Heat-N-Eat fresh prepared food sector of the grocery store / supermarket reached $62.45 billion.  More Foodservice Solutions® team estimates that it has been out pacing all other sectors of retail foodservice growth; growing at about 7.5%  per year. Does anyone wonder where the restaurant customers are migrating? 

Garnering such positive results grocery stores are now expanding day-part food sales moving into breakfast, lunch, and dinner.  With each new day-part success the grocery sector is positioning for a battle of share of stomach like consumers and restaurants have never seen.  Is your company prepared for new competitors? Are you still practicing Brand Protectionism?

Invite www.FoodserviceSolutions.us  to complete a Migration Marketing assessment, grocerant program assessment or a grocerant ScoreCard. Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant Steve@FoodserviceSolutions.us