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From Burger King's Sourdough Bacon Cheeseburger to Taco Bell's 7-Layer Nacho, quick-service restaurants have a history of profiting from limited-time-only menu items. But can this in-and-out strategy, which has lifted candy and other sales inside convenience stores, succeed in the industry's less-established foodservice category?
Has McDonald's sold green shakes on St. Patrick's Day?
"C-stores can put together these programs just as well as quick-service and full-service restaurants can," noted Hal Sieling, a Carlsbad, Calif.-based restaurant consultant whose clients include Burger King, Denny's, Jack In The Box, McDonald's and others. "Some of the companies doing the best in their class, like Applebee's and Wendy's, have limited-time-only and seasonal items.
"As it becomes more obvious to c-store operators, no one in the business will be immune to the success of these programs."
Some c-stores got "in and out" early. For instance, Fas Mart and Shore Stop stores, operated by GPM Investments, sell breakfast foods, hot and cold sandwiches, fried chicken, entrees and more. The Mechanicsville, Va.-based retailer promotes each of its foodservice subcategories — for example, roller grill or deli — each month, often featuring new or limited-time items. A heavy emphasis is placed on cross–category bundling and seasonal offers.
"Our limited-time items keep the menu fresh for regular customers," said Russ Quick, marketing manager for the 170-unit retailer. "[The 30-day runs] are a way to take advantage of the latest and hottest new and niche items."
Seasonality plays a big role. During spring and summer, the chain's customers are looking for lighter fare, such as salads and low-calorie, low-fat entrees. During the winter, the demand increases for soups and combos bundled with coffee, Quick said. "The more flexible the foodservice menu can be, the bigger the opportunity to increase frequency of customer purchases. The effort pays off in increased sales, greater customer traffic, becoming a destination stop and higher margins."
Each fourth quarter, the chain's execs meet with vendor partners to review new products for the year ahead; additional meetings are held during the year as new items hit the market. Before any new item is considered, vendors must submit a Fas Mart/Shore Stop "new item criteria" form, which asks for product costs, margin targets, operational challenges, available point-of-purchase materials and more. The chain test markets in-and-out and other products quarterly to gauge customer reaction, operational issues and pricing strategies, before rolling them out chainwide. "This ensures quick speed to shelf for new items," Quick noted. (See "Fas Mart to Suppliers: Answer This," Page 102.)
Complete programs — from how to prepare the product to how to ring it up — are written for items that survive the process and included monthly sales planners. New products are introduced at monthly sales meetings.
"Customers are very discriminating about food quality and expect high-quality products at reasonable prices," Quick said. "Failing to meet those standards could spell trouble."
Pitfalls and Promotions
Even with such thought-out preparation, however, limited-time item introductions are not without challenges. Insufficient employee training and inadequate exit planning are potential pitfalls, Quick said. "If employees can't execute and suggestive-sell these products, they will not be successful. Store personnel must be able to change point-of-sale materials on a timely basis and sell through existing inventory. Storage space is at a premium and there can't be a backlog of past in/out promotions."
Within 10 days of the end of the limited-time or seasonal promotion, plans for an attractively priced combo offer are put together. If needed, product is transferred to stores selling it through.
One strategy that has worked well in Fas Mart and Shore Stop stores: tying the limited-time offer to similar quick-service restaurant efforts. "If we want to promote popcorn chicken, we do it the same time KFC is doing it," Quick said. "We are selling the same product and leveraging their advertising. We've done it and sold a truckload of popcorn chicken."
Additional QSR-like limited-time programs have featured boneless honey BBQ wings, an eight-piece chicken meal for $5.99 and a $1.99 breakfast combo. Among the retailer's other most successful limited-time offerings: hot sub sandwiches, cinnamon raisin biscuits and fish sandwiches.
Those not likely to be repeated: mac & cheese bites and popcorn shrimp. "These were difficult for employees in the field to execute," Quick noted.
Fas Mart/Shore Stop stores aren't alone in the use of in-and-outs to pique customer interest. At Jr. Food Stores, based in Jonesboro, Ark., both the chain's proprietary chicken-and-sides Country Cookin' Kitchen operation and its Blimpie sub, Bullets burger and Baskin-Robbins businesses have seen foods come and go.
The 13-store chain uses limited-time offerings as a testing ground for additions to its proprietary menu to keep customer boredom at bay. For example, a fried pie introduced as a limited-time promotion proved popular enough to become a permanent dessert choice.
The criteria for any sampled product: margin, adaptability and cross-merchandising potential. "If customers are interested in a test product sold at one of our higher-volume locations, we'll try a product in more stores," said Wade Quinn III, Jr. Food Stores' vice president. "We tried a big, King-Edward-looking turkey leg in one store. They weren't well received and we didn't go any further."
The chain, which also sells Pizza Pro foods in some locations and is introducing Krispy Kreme doughnuts, has a strong lunch business with its entree-and-three-vegetables meal, especially at a store in a factory district. It occasionally sells products planned only as in-and-out items, like spicy wings or a Mexican item. "But you have to balance that with consistency," Quinn said.
More seasonal and limited-time items are found on the chain's QSR menus. "But they are not sure things," he noted. "If Bullets does a blackened chicken sandwich, it doesn't mean a substantial lift for us. Promotions of mainstays do better.
"We may run a blackened chicken sandwich for six weeks, then offer a BBQ sandwich for six weeks, but make sure the third promotion features a staple item, like a double cheeseburger combo. Blimpie is trying so many new things, it is hard to keep up."
Indeed, change is difficult, noted restaurant consultant Sieling. The most successful limited-time or seasonal items employ the operational platform used for other menu items. "Don't try to totally reinvent the wheel," he said. "Don't try to bring in soup for a limited time, if you haven't had soup pots before."
Also, retailers who are still struggling to firm up their core menu, may want to hold off on the limited-time introductions, said Paul Kurnit, a trends expert and marketing consultant based in Chappaqua, N.Y.
The c-store industry is ready to take on limited-time menus, he said, but retailers need to find the standard, day-in, day-out volume and margin providers, while creating "news."
"To me, the 'news' is an overlay, not a driver. First you want to know what you stand for and what people keep coming in for. If you can read those winners while reading the in-and-out products, God bless."
C-store behavior is a studied behavior, he continued, and consumers are looking for consistency of delivery. "Creating innovation in foodservice is a good idea, but you cannot violate the expectation of the consumer, if they're expecting what they had before."
That mentality is "a bit of a disconnect," he noted. "Everybody wants something new, but they want something familiar. That's very much a kid's perspective, which is why the Happy Meal works — the toy keeps changing, but the food doesn't.
"The concept of newness in the context of familiarity has broad appeal. At quick-service restaurants, the limited-time item may draw you into the store, but you still want to be able to get the Whopper or Big Mac."