Is the value-conscious consumer the new norm?
A: During the downturn, a persistent theme was consumers search for value. Immediately, lower prices come to mind when people think about value, but that doesn’t explain Panera’s and Chipotle’s strong performance during the downturn. These fastcasual bellweathers are relatively expensive options, yet people understood the value in the brands.
The campaign Subway developed around their “$5 footlong” promotion completely redefined the value landscape in QSR (quick service restaurants). Chains that did not react with their own compelling value propositions suffered. Even casual dining chains reacted to the price point, trying to match value at lunch.
Similarly, McDonald’s expanded coffee line forced Starbucks to rethink their price points as they saw McDonald’s increase its market share with a value-conscious themed advertising campaign.
So, consumers are more focused on value than ever before, but price, while important, is not the consumers’ sole measure of value.