Limited-time offers (LTOs) continue to drum up significant business for restaurants, particularly among fast-food chains, in 2024.
“We’re seeing a ton of limited-time offers out there in the marketplace, and we’re seeing a lot of interest in it from consumers,” said Lizzy Freier, Technomic’s director of menu research and insights, at the COEX 2024 event in Kansas City recently.
Studies show that 91% of people are more inclined to visit a restaurant with new items on the menu, according to an article by Restobiz.
What’s so appealing about LTOs? Let’s examine:
The Allure
The fact that these items are only offered for a limited time is a huge draw and it capitalizes on consumers’ FOMO – Fear of Missing Out – according to Reilly Newman, founder at Motif Brands.
Newman uses Taco Bell as an example of a chain that created demand by limiting the time an item was on the menu when it removed fan favorites like the Mexican Pizza and then brought it back.
“Living in a world where we can have anything delivered to us, access to supply is no longer an issue. Brands would be wise to include LTOs into their menu to add diversity and create scarcity for items,” Newman says.
“LTOs are popular because they leverage the unlimited supply, access, and options that consumers now face.”
“We have about two-fifths of consumers who say that they’re actually more likely to try new and unique flavors than they were three years ago. They’re also more likely to visit a restaurant that offers newer innovative flavors. And a third are even willing to spend more on a restaurant meal that features some of these new or unique flavors,” Freier added.
The Purpose
Michael Della Penna, InMarket’s Chief Strategy Officer who has advised companies like Stop & Shop and Dunkin’, says that LTOs can be used to understand consumer behavior and that they can engage new diners while keeping loyal customers through product innovation or celebrity-endorsed value meals.
“Whether it’s launching new and exciting products like Sonic’s Pickle Slushie, the return of beloved favorites like McDonald’s McRib, Snack Wrap, and Double Big Mac, or Mariah Carey’s ‘12 Days of Free Food’ holiday meal menu, launching products for a limited time or creating celebrity menu tie-ins and value meals creates a sense of urgency for customers, which can be a fantastic tool for driving visitation and frequency during the offer period,” Della Penna says.
Doug Taylor, CEO of Taylor Chip, feels LTOs can help companies figure out how to better improve their regular menu lineup.
Why Now?
According to an article by QSR Magazine, the National Restaurant Association said that food and beverage outlays for restaurants were up 21.8% in 2022, while labor costs rose 18.3%, which forced operators to raise prices. Because consumers are dealing with inflation as well, operators have had to be thrifty when it comes to justifying their higher prices and LTOs are a great way to do that.
Will This Trend Continue?
“People are always going to want to try new things, and there will always be limited-time offers. But when it comes down to it, I think people appreciate and desire consistency within the offerings restaurants and dessert concepts provide,” Taylor said.
“Most of us are creatures of habit. Of course, none of us mind having a little bit of fun with some switch-ups.”
Della Penna said that because of the fierce competition in the restaurant industry, LTOs are effective tools for creating buzz for a brand and getting diners to stop in and spend some money. Newman feels LTOs will continue to be popular because they increase the perceived value of items.
“Rooted in desire and anticipation, these buying experiences become more special and allow for higher prices. LTOs create better consumer experiences as well as more profitable items for brands,” Newman said.
