Restaurants caught in a squeeze play


As consumers cut back on entertainment costs, restaurants are among the first items to be crossed off the list. According to a recent article in the New York Times, this is especially true for mid-priced full-service chains caught in the middle of high-end standalone restaurants with the kind of clientele less likely to bail on their favorite eateries, and the bottom dollar fast food chains.

The current economy even has the high-end shops scrambling, however, and both full-service categories are bracing for a bleak holiday season.

The standalones have another advantage over the chains, however, which is their relative ability to turn on a dime in making adjustments to new market realities. They can change policy and menu at will, whereas the big nationals often need considerable lead time to make even simple changes. On the other hand, the nationals can marshall their size in the form of advertising increases and negotiating power with suppliers.

The fast service shops (literally down the food chain) can unlock their doors and accept the business coming from those who have at least temporarily abandoned their pricier competitors. If you need proof, just look at McDonald’s Q3 2008 results, during which they celebrated an 11% increase over Q3 2007.

RBR/TVBR observation: This is information you can use. Broadcast outlets are a great place on which to advertise restaurants, and the unique situation each of these broadly inclusive restaurant categories faces should go a long way in helping your sales staff tailor a pitch. Whether it’s a great new feature at a standalone, a new price-friendly option at a chain or a new reminder that one fast food restaurant is better than all the others, an appropriate message can go out over your station soon, to help these troubled businesses – and yours – prosper in troubled times.