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Restaurants can still find growth opportunities at lunch

Restaurants can still find growth opportunities at lunch

Boloco and Fazoli’s share successful strategies for attracting business during the daypart

Despite shrinking visits to restaurants at lunch since the start of the recession, growth opportunities still exist, according to global market research firm The NPD Group.
     
“Lunch is the biggest meal of the foodservice industry, [but visits are] still flat or slightly negative,” said Bonnie Riggs, an analyst for Port Washington, N.Y.-based NPD. “It’s not just the slow recovery … It’s changing dynamics.”

Once upon a time, visiting a restaurant meant an hour break from work, and for some it stretched to making deals over three martinis. Today, the reality lies in stark contrast.
Among the many variables contributing to lackluster lunch traffic is the number of consumers who are brown-bagging their lunch, either to save money or to better control what they eat, NPD found.  

In the year ended February 2014, 11 percent of all lunches were carried from home. In addition, more women in the workforce once helped grow traffic at lunch, but women are now entering the traditional workforce at a slower rate, and the positive effects have been diminished. More Americans are also working from home and not going out for lunch for the most part. According to the U.S. Census Bureau, 13.4 million Americans worked from home in 2010. Riggs notes that she expects that number is considerably higher now due to advances in technology that further enable telecommuting, as well as professionals creating second careers after losing jobs during the recession.

“You’ve got a lot of things working against you,” said Riggs.

But one opportunity for operators, as Riggs see it, lies in those who skip lunch entirely. According to the data, 14 percent of all lunch meals are skipped.

In addition to gathering data about consumers’ recent lunch habits, NPD asked consumers what, if any, suggestions they had for restaurants to improve their experience and motivate them to make a return visit. The responses were centered on lower prices and adding value, including loyalty cards, promotions and coupons; improving customer service; and offering quality and a variety of food, including keeping food fresh, healthy and right-sized.

(Re)doing lunch

Visits may be down at lunch overall, but not all brands are experiencing the losses. Those that have been consistently meeting consumers’ changing needs have been able to buck the trend. Boston-based Boloco and Lexington, Ky.-based Fazoli’s are two such brands that have discovered a way to maintain, and even grow, their lunch business.

Boloco

Lunch accounts for 65 percent of business at this fast-casual burrito chain, with more than 20 locations in and around Boston and other urban areas in the Northeast. Though the competition at lunch has heated up in Beantown, with many large chains entering the market in recent years, Boloco has managed to maintain a steady lunch business because of its convenient locations near large populations of working professionals and students, its variety-filled menu, and its ordering and payment technology advances.
    
“We try to provide options and convenience at the meal period,” said Patrick Renna, Boloco’s CEO. “We offer 12 [different kinds of] burritos. We [also] have online ordering, app payment and remote kioks.”

To attract new customers, including those who skip lunch,  Boloco brings the food to them with its Burrito Drops program. Each restaurant has a local marketing budget for making a certain amount of weekly burrito drops — deliveries of samples to area offices — designed to reel in customers by giving them a complimentary taste.

“Lunch is our best chance for gaining sales growth,” said Renna. “You tend to see a correlation between a consistent spend in burrito drops to growth in lunch business.”

Fazoli’s

Lunch has been a success story for Fazoli’s ever since the fast-casual Italian chain introduced its $5 lunch program in January. The new deal, inspired in part by Subway’s successful $5 Footlong promotion, allows customers to pick any two lunch items, and includes a refillable soft drink.

“Lunch is mostly about value and speed of service and variety,” said Jon Quinn, Fazoli’s vice president of marketing. “Our lunch traffic has eclisped our dinner traffic [since we] repackaged and relaunched lunch.”

A quarter of all lunch incidences now include the deal, more than double the previous lunch program, Quinn said.

The 217-unit chain has been promoting the new program both in-store and with outdoor advertising, as well as through its Pasta Patrol, a local restaurant marketing program that delivers collateral and sometimes the chain’s signature breadsticks to potential customers.

TAGS: Operations
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