Report: Restaurant LTOs Forge Long-Term Brand Connections

Limited-time offers (LTOs) significantly impact consumer behavior within the foodservice industry. In fact, 91% percent of consumers are more inclined to visit establishments that provide new items, according to a recent report from Circana which analyzed over 30 diverse LTO campaigns.

These time-sensitive promotions not only create buzz but also sustain engagement with existing, heavier buyers, thereby countering their natural, limited availability and sales decline.

A powerful example is McDonald’s 2023 Grimace Birthday Meal campaign, which generated significant social media attention among Gen Z consumers — and a whopping 11.7% increase in same-store sales for the chain in the second quarter.

Keeping Innovation Simple

According to Circana, innovation doesn’t always demand a revolutionary concept — sometimes, simplicity prevails.

Chipotle’s Chicken al Pastor burrito LTO exemplifies this strategy. A quarter of buyers actively participated in the Spring 2023 campaign despite the LTO costing approximately 7% more than the average price of a typical chicken burrito.

Furthermore, almost 80% of Chicken al Pastor buyers expressed a heightened intention to visit Chipotle more frequently, showcasing the LTO’s profound influence on reshaping consumer behavior and fostering brand loyalty.

Balancing Revenue and Risk

To manage cannibalization risks, the report advocates for strategic pricing and specific behavior targeting. Leveraging nostalgia by reintroducing discontinued items also comes into play.

“Nostalgia is a powerful ingredient in the recipe for LTO success, targeting older consumers by resurrecting previously discontinued menu items,” said David Portalatin, senior vice president and industry advisor of Food and Foodservice at Circana. “While LTOs are designed to be temporary, their impact on the perception of a brand is lasting, contributing to maintaining a positive brand image even after the limited-time offer concludes.”

Winning Inspirations and Upcoming Trends

According to Portalatin, elevated forms or new twists on familiar favorites have been the most successful LTO drivers in recent days. “These don’t necessarily require new items, but variety within existing items,” he told The Food Institute.

Consumers are also looking for seasonal and innovative flavors, such as spicy and fruity. “For example, a new take on the chicken sandwich, ‘nacho’ fries, etc,” he added. “These are already popular foods, but still offer consumers something new.”

Convenience stores are also an LTO space to watch in 2024.

“As c-stores look to expand their foodservice offerings, I’d expect LTO strategies to emerge there similar to what we’ve come to expect in the QSR segment,” Portalatin concluded.

The Food Institute Podcast

The foodservice industry has had its fair share of twists and turns the past few years, but where is it headed in 2024? Lizzy Freier, Director, Menu Research & Insights at Technomic joins The Food Institute Podcast to talk restaurant traffic, international cuisines, the breakfast daypart, LTOs and more.