As severe price pressures continue for customers and restaurants alike, more consumers are turning to money-saving options such as coupons and loyalty rewards to stretch their dollars further.
That’s a conclusion reached by Restaurant Brands International (RBI), whose brands include Burger King, Tim Hortons, and Popeyes Louisiana Kitchen.
RBI, like many restaurant chains and operators, has raised menu prices this year to mitigate growing costs for key ingredients like chicken and coffee.
Toronto-based RBI’s CEO Jose Cil told CNBC that while the company hasn’t seen any significant change to what diners are buying from its restaurants amid this context, the company and the broader fast-food sector is seeing some noticeable shifts in consumer behaviour.
Cil says low-income consumers are spending less of their money on burgers and fries, while higher-income diners seem to be trading down from casual-dining or fast-casual restaurants. That latter trend has also been spotted by others in the QSR space, such as KFC owner Yum Brands, McDonald’s, and Chipotle Mexican Grill.
Consumers are also increasingly looking to utilize coupons, offers, and loyalty rewards to stretch their dollars. RBI’s eateries are seeing an uptick in customers redeeming paper coupons and loyalty program rewards to save money on the price of their meals and find the best value for their money.
Cill added that the company is attempting to move those customers away from coupons and onto its brands’ mobile apps. That, of course, offers key advantages for restaurants in today’s climate. Not only can customers still access value for money through digital coupons and offers, but the company can gain valuable insights via digital data. In exchange for customers redeeming points for free menu items, as is on offer at Burger King, the company learns more about its customers and how to target them more effectively with promotions and deals.
Directing customers towards digital operations has already reaped reward for RBI. Its digital sales saw double-digit growth year-over-year, climbing to over US$3 billion and representing one-third of RBI’s system-wide sales.