The vast majority of consumers and businesses have never experienced an economic headwind of this magnitude. Every restaurateur knows someone who has shuttered their operation or is holding on by the proverbial thread.
In this environment the lure of the $1 Menu popularized by the major chains is powerful. Customers are clearly pinching pennies if they have any. The recent GDP data showing a contraction (-3.8% which I suspect will be revised downward) adds empirical support to the declining traffic counts that restaurants are experiencing. The lure is even more powerful because by now restaurateurs have tried several promotional variants and none have had any positive impact. All that is left it seems is to go to the $1 Menu.
Simply putting your JR Whopper on the $1 menu is not the solution. If your restaurant got 14% of its revenue from the $1 Menu, I am fairly confident that the situation would not be sustainable. Create new cost effective items for the $1 Menu that enables you to offer the $1 Menu in a manner that does not cannibalize your entire pricing structure. You must provide value to your customer, however you must do it in a fashion that is sustainable.
