When it comes to eating in our favourite high street, fast-food outlets, we all love a meal deal. Figures released by global information company The NPD Group show that availability and usage of meal deals at British quick-service restaurants (QSR) (1) grew by 22% between year ending (YE) December 2010 and YE December 2015. This is equivalent to 185 million more ‘meal deal’ visits.
A meal deal is now used in nearly one in five (18%) of all visits to the QSR fast-food channel, up from 15% in 2010. This is higher than the average for Britain’s eating-out (2) market, but lower than the popular Casual Dining channel (3), where meal deals are used in 23% of visits.
Meal deals lock in customers
Britons made 5.8 billion visits to fast-food outlets in 2015 and the QSR operators know a meal deal is good business. Consumers spend 6% more (average bill per consumer of £3.87 vs. £3.65) when using a meal deal in a fast-food outlet. This is the result of customers buying a larger number of items on these visits (2.9 items vs. 2.0 items) thanks to the appeal of being able to pick up all elements of their meal – food and a beverage – all at an attractive discount. Operators know that in an increasingly competitive market awash with choice, where visits are at a premium, it makes sense to ‘lock-in’ consumer spend by using meal deals.
Fast food has helped slow the decline in eating out
The meal deal formula works well for fast-food outlets. While there has been an overall loss of visits in Britain’s eating out market in general (in 2015 there were 500 million fewer eating out visits than in 2009), the fast-food channel has successfully resisted this overall trend of declining visits. Meal deals have played a role in that.
Jack MacIntyre, Senior Account Manager at the NPD Group, said: “We all find discounts irresistible and in Britain’s leading burger, chicken and pizza chains, meal deals feature in at least a quarter of visits. People love meal deals because they offer great value for money. In today’s price-sensitive environment the cost of a meal definitely plays a part in our decision to visit a fast-food outlet. Meal deals are also convenient, especially when people can pick up food with a complimentary drink all in one go.”
Meal deals make customers happy
When a customer visits a fast-food outlet and makes use of a meal deal, the chance they will return within 30 days to the same fast-food outlet, or another in the same chain, is 7% higher than for a visit not involving a meal deal. When it comes to satisfaction with ‘value of money’, 31% of meal deal visits are rated ‘excellent’ against 25% for non-promoted visits. That boosts the wider measure of ‘overall satisfaction’ with 32% of visits involving a meal deal being rated ‘excellent’ – five percentage points higher than for non-promoted visits.
Jack MacIntrye added: “The fast-food operators have plenty to gain when they notch up an ‘excellent’ score. We know that 75% of consumers who report ‘excellent’ overall satisfaction say they will ‘definitely’ return within 30 days. If a fast-food visit results in the lower rating of ‘very good’ rather than ‘excellent’, only 50% of customers say they intend to come back in the 30-day timeframe. Meal deals increase the number of ‘excellent’ customer ratings and so are definitely good for business.”