Business Tip: Vary Menu Prices to Appeal to Many Demographics
New research suggests that food service businesses that appeal to middle- and low-income consumers can build incremental sales just as much as those focusing on diners with large amounts of disposable income. Although higher-income consumers dine more often — twice as many dine out more than once a week — affluent diners make up only a small portion of the market share. As such, keeping lower income families and individuals in mind as you manage your restaurant can benefit your business overall.
The research shows that affluent consumers are more likely to dine at full-service restaurants than their lower-income counterparts, a statistic that falls in line with the price ranges associated with fast-food vs. sit-down restaurants. However, fast-casual restaurant concepts — think Chipotle, Panera, etc. — remain tailored toward middle- and high-income diners, a disparity that suggests such restaurants are missing a potentially large demographic that could increase business.
How can you appeal to high-/middle- and low-income diners? Simple: offer a varied menu.
Varied not just in terms of food, but — more importantly — with regards to price. By offering a selection of higher priced, more “premium” items and an affordable range of entrees, perhaps separated on your menu or menu board, you can cater to multiple demographics. Think fast food dollar menus — sure, many of these restaurants offer a burger, burrito, or similar entree with “premium” meat that costs a fair amount for fast food, but by offering a range of low-priced entrees, sides, drinks, and desserts, they appeal to lower-income and younger demographics, too.
So take a look at your menu. Are their options at multiple price points, or do your entrees tend to cluster around a similar range of value? If you mix things up, you might be able to boost business little by little just by appealing to more people.
Certainly something to think about.
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