McDonald’s and Other Chains Boost Traffic with Value OffersMcDonald’s and Other Chains Boost Traffic with Value Offers Data from Placer.ai reveals that restaurants offering discounts, such as McDonald’s, have experienced increased foot traffic. McDonald’s $5 Value Offer After implementing its $5 value offer in late June, McDonald’s saw a surge in traffic. On Tuesday, June 25, traffic was up 8% compared to the previous year, and on Wednesday, June 26, it was up 7.1%. Other Chains with Value Promotions Other chains that have implemented value promotions have also seen positive results: * Buffalo Wild Wings: Unlimited boneless wings on Mondays and Wednesdays led to an 8.1% increase in foot traffic. * Starbucks: 50% discounts for app users on Fridays resulted in a 20% jump in traffic on the first Friday of the promotion. * Chili’s: The upgraded “3 and Me” menu, offering a three-course meal for as low as $10.99, has significantly increased traffic. Impact of High Prices Restaurants have been struggling with high prices, which have kept some customers away. Full-service restaurants have raised prices 0.6% and limited-service restaurants have raised prices 0.2% in June, both higher than grocers’ 0.1% increase. Over the past year, prices have increased 4.3% at limited-service restaurants and 3.9% at full-service concepts, making customers more price-sensitive. Chains Responding with Value Offers To counter declining traffic, chains have been introducing value offers. Del Taco recently unveiled a new $2-and-under value menu, while McDonald’s launched its $5 bundle. Overall, these value offers have proven effective in attracting customers and driving traffic to restaurants.
McDonald’s and other chains are seeing traffic growth from value offers. | Photo courtesy of McDonald’s
Imagine that: Companies offering discounts are apparently getting more customers.
That, at least, is based on data from the foot traffic tracking firm Placer.ai, which said this week that select chains offering discounts have seen increases in traffic since they started offering them.
That includes McDonald’s, which saw traffic growth after it kicked off its $5 value offer late last month.
But the firm also looked at traffic at chains like Buffalo Wild Wings, Starbucks and Chili’s, finding that each of them have seen visits to their restaurants increase after they started pushing discounts.
That’s the plan, of course. Brands have been fretting about traffic declines for months, worried that high prices have been keeping more customers away.
Restaurants have continued raising prices at rates higher than grocers, intensifying the belief that they are no longer worth the money. Full-service restaurants raised prices 0.6% in June, according to new data from the U.S. Labor Department, while limited-service restaurants raised prices 0.2%.
Both were higher than the 0.1% increase at grocers. But the difference is particularly notable when considering prices over the past year, up 4.3% at limited-service restaurants and 3.9% at full-service concepts.
Numerous chains have been pushing value offers in a bid to lure customers and keep pace with the larger chains. That includes Del Taco, the Mexican fast-food chain, which on Thursday revealed a new $2-and-under value menu.
McDonald’s this summer kicked the value push into overdrive when it convinced its franchisees, with help from the beverage company Coca-Cola, to offer a bundle of items at $5.
The offer, which started June 24, led to traffic growth in the days after it was first offered. For instance, traffic was up 8% on Tuesday, June 25, when compared with a Tuesday a year earlier. It was up 7.1% on Wednesday, June 26, compared with a year earlier.
Starbucks, meanwhile, has been aggressively pushing value and discounts as the coffee shop giant has dealt with unusual declines in traffic starting late last year. The Seattle-based company responded with a new “pairings” menu, pairing small coffee drinks with various food items at between $5 and $7.
But it has also heavily courted app users with 50% discounts on Fridays starting on May 13, among other such promotions. It’s worked like a charm: On Friday May 3, before that promotion was launched, traffic was down 1.1% from a year ago.
The first Friday the promotion was offered led to a 20% jump in traffic, according to Placer.ai.
The traffic improvement isn’t limited to the fast-food sector. In late April, the bar-and-grill chain Chili’s upgraded its “3 and Me” menu, offering a three-course meal for as low as $10.99.
That led to a substantial boost in traffic in the weeks since then. The company’s Big Smasher Burger, a direct competitor to McDonald’s Big Mac, along with its chicken sandwich, helped drive more traffic.
Buffalo Wild Wings, meanwhile, has seen visits increase on Mondays and Wednesdays after that chain started offering unlimited boneless wings on those days starting on May 13. Foot traffic at the chain rose 8.1% after the launch, led by strong increases on those two days of the week.
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Restaurant Business Editor-in-Chief Jonathan Maze is a longtime industry journalist who writes about restaurant finance, mergers and acquisitions and the economy, with a particular focus on quick-service restaurants.
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