Boston Market thinks it may have found a way to get cash-strapped consumers to visit its restaurants. The fast-casual chain today (Wednesday) rolled out a nationwide promotion, dubbed “$2.99 Market Meal Deals,” which offers smaller portions of four menu favorites at $2.99 each. In an interview with Brandweek, Boston Market CEO Lane Cardwell said the price point would attract consumers who have cut back on their restaurant purchases and those who can’t afford to eat out at all. (Restaurant traffic was down three percent last year, per a new report by The NPD Group.) Cardwell, a restaurant vet with 31 years of experience who was brought in to run the chain, previously owned by McDonald’s, discussed the promotion and why restaurants are among the last industries to recover. Excerpts from that conversation are below.
Brandweek: How exactly would you describe the promotion you’re kicking off today?
Lane Cardwell: What we’re offering, for a limited time through March 21, is the chance for our guests to eat four smaller portion meals for a great price of $2.99. It features [foods] that we’re already known for [on our menu], but we’re just trying to package them together in a way that gives people a chance to lighten their economic load.
BW: It’s the lowest value meal Boston Market has ever introduced. Are you worried you won’t make as much of a profit off this?
LC: We won’t make as much money, but [promotions] like this are an investment in [consumer brand] loyalty. We know that times are hard for people . . . so we try to do things like this on a regular basis to keep the bond with our guests.
BW: But Boston Market already has a value-priced menu offering: the “create your own plate” meal offer. How is this one different?
LC: This is a smaller portion at a [lower] price. “Create your plate” is an a la carte approach to our traditional menu, where you select a meat—whether it’s . . . white chicken, turkey, meatloaf or brisket—and add up to three side dishes for $1 each.
The $2.99 meals, on the other hand, are a way for people to come in and get the great food we’re known for—chicken side dishes, meat loaf, soup and salad. They can come in and get a smaller portion than we’d normally serve and pay a [significantly] reduced price for it. Across the industry, we see the consumer is still having a hard time. The stock market has rebounded, but the consumer has not.
BW: Why is $2.99 the magic price point?
LC: We think it’s the number that doesn’t rule many people out. We could have [rolled out] a $4.99 offer with slightly larger portions, but we think at $2.99, there are very few people who will say, “Well, I just can’t afford to come in and try that.”
BW: Okay, we keep talking about this “consumer,” but what type of diner does this promotion appeal to?
LC: I think you have two types: The first will be people who are on a reduced budget, who have to give up dining out on a frequent basis or dining out altogether. We spoke with a lot of these people back in November—when we did a $1 chicken dinner promotion—and found that, to our dismay, there is still a large number of people who literally cannot afford to eat out almost at any price. Secondly, we have a regular guest who isn’t as hungry as the food [portions] being offered by a lot of the different chains. Here, we’ve tried to match quantity of food at a great price to give people an extra reason to come in.
We also have a lot of older customers who we think this portion size would be very appropriate for. They might be splitting the meal with someone else or getting their own meal, but now, they no longer have to split and they can still get a split-meal price.
BW: Do you think this is indicative of some larger trend—or marketing approach—in the restaurant industry? Are competitors doing something similar?
LC: We have seen a lot of different companies take a nontraditional approach to their traditional menu, which is what we’re doing here, and that is trying to figure out [what will get the consumer to spend] and it’s almost like looking at it in layers. They already have a regular guest layer. Then you try to figure out at what price and quantity can you afford to layer in another group who can’t come in here all the time or at all.
BW: How are you getting the word out?
LC: We’re not doing TV, but we’ll have [in-store] banners, posters and we’re also promoting it on our Web site. [In addition], we’re sending e-mail blasts to all of our VIP club members, and there are more than 500,000 of them. And, deals like this also get picked up on Web sites that feature deals. Some of these are local, but quite a few also have a good following. [The effort was created in-house, with PR help from Fleishman-Hillard.]
BW: What’s your goal for the promotion, especially as it’s running for a limited time only?
LC: We’re doing this as both a promotion and a test. We’re trying to determine if there is a place for a lower-priced group of offerings that would appeal to people on a regular basis on our menu.
BW: How far along are restaurants when it comes to economic recovery?
LC: It will take a while. People’s behaviors have changed. Restaurants are typically the first into a recession and the first out of a recession. It’s a function of confidence. As people feel less confident, they dial back on restaurant spending, and a recession usually isn’t far behind. Towards the end of a recession, they start to feel more confident and change back to [normal] restaurant spending. This time, it looks like it may be different. It looks like we’re the first in and among the last ones out. There are signs that people—for the first time in a long time—have changed their dining out behavior.