Motley Fool Money Restaurants Play Value Games
Oct 6, 2024
David Henkes, Senior Principal for Technomic, dives into the heated value wars in the restaurant industry. He reveals how McDonald's strategy has reshaped fast food pricing and why it now rivals sit-down meals. Henkes highlights the impressive performance of Chili's, which boasts a 150% stock increase through clever marketing. The discussion also covers the intricacies of pricing amid rising costs, and food trends from Europe, showcasing advancements in automation and environmental practices.
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Value Wars
- Restaurant traffic is declining, making it hard to profit.
- Value menus aim to boost traffic, but overall industry visits are still down.
McDonald's App Strategy
- McDonald's uses its app to offer discounts and deals, driving app usage and gathering data.
- This allows dynamic pricing and targeted offers while promoting higher-margin items.
Chili's Success
- Chili's has seen significant stock growth and same-store sales increase by focusing on value and marketing against fast food.
- They emphasize a better product and experience, leading to increased traffic.