A new report by Vericast illustrated the lengths consumers are going to save amid inflation. More than anything, many consumers are bypassing restaurants in favor of cooking frozen pizza at home.
Vericast’s 2023 Restaurant TrendWatch report, released today, revealed 64% of consumers agree that rising prices are making dining out too expensive. Grocery stores recognized that sentiment in 2022, evidenced by a surge in pizza promotions; Numerator found that leading retailers offered 214% more pizza promotions last year, with Aldi’s deals increasing by 2,200%, followed by Publix (620%) and Kroger (367%).
“Consumers took advantage of these offers. … Restaurants who want to win back a piece of their pie should invest in their loyalty programs and coupon incentives,” Dana Baggett – client strategy director of Vericast’s restaurant division – told The Food Institute. “Our recent report shows that, if a restaurant doesn’t offer coupons and discounts, thirty percent (of consumers) will switch to one that does.”
Fifty-eight percent of frequent pizza consumers used a coupon or discount code in the last month to decide where to dine or order, Vericast noted. Building off that note, Baggett commented:
“There’s a psychological component and instant gratification of savings – and 80% of people end up spending more overall when they redeem a coupon.”
Key insights from Vericast’s latest analysis include:
- Pizza fans tend to double dip: in a typical week, 43% of pizza restaurant guests also purchase frozen pizza.
- 18% of consumers opt for less expensive brands of pizza or restaurants.
- Half of consumers say coupons and discounts help them choose between restaurants.
The key lies in both incentivized loyalty programs and deals offered across channels, Baggett said. Most consumers still prefer print coupons, but many also want to receive them digitally via email, apps, websites, and loyalty cards. Additionally, offers need to be targeted and tailored to consumers at ideal times.
“For example, someone who hasn’t placed an order in a couple months will likely require a greater incentive to make a return visit than someone who ordered two weeks ago,” Baggett explained. “It’s crucial for restaurants to stay top of mind among customers and promote deals regularly, especially when consumers are purchasing – or thinking about purchasing – pizza.”
The Food Institute Podcast
Click the play button above to listen to the episode.
How do you measure the financial efficiency of a fan-driven food business? Dr. James Richardson, owner of Premium Growth Solutions and author of Ramping Your Brand, joins The Food Institute Podcast to define these types of businesses and how they can succeed. Dr. Richardson pulls on historical and recent examples of these types of businesses, and what common threads contribute to their success.