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Party Line: A Valuable Lesson

I’m going to add the disclaimer that I haven’t eaten at a McDonald’s in probably 15 years, so perhaps I’m not quite as in touch with their product as others. However, their barrage of marketing — especially that of their Dollar Menu items — is impossible to escape.
 
With other fast food chains stepping up their marketing over the past year or so, McDonald’s has responded by aggressively touting its Dollar Menu and other value deals to hold onto customers. Officials said that offering cheaper prices was necessary in the current climate, and since the restaurant industry is barely growing, they need to steal customers away from rivals to grow.
 
But with McDonald’s ramping up the discounts, other establishments are retooling and offering more “values” as well. One would think this would increase revenue for the company, right?

Not necessarily. A survey found that a sampling of McDonald's franchisees rated their relations with the company below their historic levels and sales fell 1 percent during the first quarter.

My point is not that you should bring your lunch to work — although I would highly recommend that you do — but that undercutting and discounts don’t guarantee success on all fronts. Because while some might still clamor for cheap eats, others are flocking to places like Panera Bread and Chipotle where the emphasis is more on quality than quantity and employees feel good about things that they sell.

In other words, independent retailers are the Panera Bread and the discount/dollar stores are the McDonald’s of the retail world. While there are people who will always opt for cheap and easy, others will appreciate quality and value.

The expressed theme of one of Panera’s campaigns was “that you should leave feeling better than when you came in.” Sounds like a good plan to me.
 
By Abby Heugel
Managing Editor

Originally posted Monday, Jun. 24, 2013