How To Keep Your Restaurant Competitive as McDonald's Prices Rise

TLDR

As McDonald's prices rise, you have an opportunity to win over low and middle-income diners looking for more affordable options. Adopt practical strategies like offering loyalty programs, deals, and good portion sizes. While larger chains focus on drive-thru deals, highlight your local roots and community ties. With creative promotions and customer-focused initiatives, your restaurant can gain an edge during this time of economic uncertainty.

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McDonald's Prices Are Up - An Opportunity for Local Chains

Now that McDonald's menu prices have increased by an average of 20% over the last 2 years, smaller fast-food chains have an opportunity to win back customers by focusing on value.

Offer Value Meals and Deals

Local chains can take advantage of this shift by promoting value meals, combo deals, and discounts to attract more budget-conscious customers. For example, offering meal deals where customers can choose from a variety of mains, sides, and drinks at a fixed low price. Bundling popular items into value packs and meal kits is also an easy way to drive sales. In addition, loyalty programs with personalized deals and rewards can make customers feel valued.

Focus on Quality and Portion Sizes

While McDonald's portions have shrunk, local chains can differentiate themselves by maintaining or increasing portion sizes and focusing on high-quality ingredients. Using fresh, locally sourced ingredients and promoting a homemade feel can resonate strongly with customers seeking an alternative to mass-produced fast food. Highlighting your support of the local community may also boost your brand image.

Leverage a Mobile App

An increasing number of customers are ordering food through mobile apps. Local chains should build easy-to-use mobile apps to streamline the customer experience, offer mobile deals and rewards, and boost convenience. For example, Per Diem allows restaurants to set up mobile ordering and offer their loyalty program through the app. Integrating mobile payments like Apple Pay or Google Pay can also reduce wait times and increase sales.

By promoting value, quality, and convenience, local fast-food chains can attract deal-seeking customers in search of an alternative to pricier options like McDonald's. Focusing on what makes your brand unique and leveraging technology to enhance the customer experience will set you apart from the competition.

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Control Operating Costs With Smart Purchasing and Staffing

To remain competitive, smaller chains should focus on controlling operating costs through strategic purchasing and staffing decisions. According to industry standards, restaurant labor costs should ideally be 25-35% of gross sales. Carefully managing employee hours and scheduling efficiently can help reduce labor costs. Implementing smart inventory management is also crucial for reducing food waste and controlling costs.

Make Intelligent Purchase Decisions

Making intelligent purchase decisions at the right time can help control restaurant costs. Buying in bulk when food prices are low and ingredients are in season allows you to get better deals from suppliers. You can then store it properly and use the ingredients when prices rise again. Perishable goods should still be purchased based on your menu needs to avoid spoilage.

Increase Perceived Value

While raising your prices may seem necessary to match increasing costs, it can backfire by driving away budget-conscious customers. Instead, focus on adding perceived value through extras like a free side or drink with a meal. You can also introduce combo meals, daily specials, and loyalty rewards to give customers a sense of getting more for their money.

Keeping a close eye on controllable costs and finding ways to maximize value for your customers will help smaller chains stay competitive even as larger chains raise their prices. With the right combination of efficiency, creativity and customer care, local restaurants can turn this inflationary environment into an opportunity for growth.

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Use Technology to Build Customer Loyalty

If you want to compete with McDonald's, leverage technology like mobile apps and kiosks to boost customer loyalty. According to studies, 56% of consumers engage with restaurant loyalty programs through apps. Per Diem white-label allows customers to order, pay, and access loyalty programs with one tap, boosting engagement and sales.

Integrate a loyalty program to reward repeat customers. For example, offer a free side or dessert after five purchases. Once customers accumulate points, they'll keep coming back to redeem rewards. The key is making redemption seamless through your app.

Send push notifications to alert loyal customers about daily specials, limited-time offers, and exclusive deals. Keep customers engaged by varying message content and cadence. For example, offer flash sales that are only announced through the app.

Use data from your loyalty program and app to personalize the customer experience. Track customers' favorite menu items, locations, and order history to tailor recommendations and rewards. Customers will appreciate your attention to detail.

While technology cannot replace friendly service and quality food, it complements your operations. An easy-to-use mobile app with a built-in loyalty program is a simple way to stay competitive, even as industry leaders raise prices. Turn new customers into loyal regulars with just a few taps on their phones.

The key is integrating technology that enhances the customer experience, not replacing it. Keep prices affordable, service personable, and quality high while using mobile apps, loyalty programs, and data to boost convenience and personalization. Meet customers where they are—on their phones—and you'll gain a competitive edge, even when times get tough.

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Differentiate Yourself With Quality, Service, and Value

Superior Taste and Fresh Ingredients

With rising costs at large chains like McDonald’s, customers are looking for higher quality at affordable prices. Focus on using the freshest, locally sourced ingredients to provide a better-tasting product. Promote your commitment to quality and freshness in your marketing to attract customers seeking an alternative.

Provide Top-Notch Service

Service is one of the most significant factors in customer satisfaction and loyalty. Invest in your employees by providing strong training on customer service best practices. Empower them to resolve issues promptly and make the customer experience a priority. Consider offering incentives for good reviews and customer satisfaction scores to keep service levels high. Loyal, happy customers will become your best advocates.

Clearly Define Your Value Proposition

Decide what makes your restaurant unique and promote that message clearly to your target customers. Maybe you offer healthier options, higher-quality ingredients, or a quick delivery experience. Focus your marketing efforts on communicating your key points of differentiation and the value you provide to customers.

Right-Size Portions and Prices

While large chains are raising prices, you have an opportunity to attract customers by keeping costs affordable. Consider offering right-sized portions, combo meals, and price points that provide value without overspending. Upselling to larger sizes and combo meals can also increase your average ticket price over time as customers see the value in your offerings.

By concentrating on the factors within your control like quality, service and value, you can thrive even as large competitors raise their prices. Focusing on keeping customers delighted and loyal will serve you well no matter what the competition does. Continuous improvement in these areas will set you up for long term success.

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Creative Marketing Ideas to Attract Customers From McDonald's

Targeted Social Media Campaigns

Run social media contests and giveaways targeting former McDonald’s customers. Burger King successfully attracted customers away from McDonald’s with creative social media campaigns. On platforms like Instagram and TikTok, post visually appealing images of your food and short videos to spread brand awareness. Keep content fresh by posting daily or several times a week.

Special Promotions and Bold Branding

Offer special promotions like two-for-one deals or free upsizes to incentivize customers to switch to you. Mimic Burger King’s bold branding and marketing strategies create familiarity and reliability for consumers. Highlight what makes your restaurant unique to stand out.

Improved Customer Service

Make new and existing customers feel like VIPs at your store and online. Train staff to engage with them and speed up order times. Make their experience more personal by learning regular customers’ names and orders. Strong customer service builds loyalty and word-of-mouth marketing.

Following these creative strategies can help smaller chains gain a competitive advantage over McDonald’s. While the fast food giant is raising prices, local restaurants have an opportunity to attract new customers by offering better value, convenience, and a memorable experience. With the right mix of promotions, branding, and customer service, you'll soon be gaining customers that McDonald's is losing.

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Final Thoughts

Though rising costs have priced some diners out of fast food giants like McDonald’s, smaller chains still have opportunities to capture these customers. Focus your marketing on value, not just low prices. Highlight affordable combos and meal deals to attract budget-conscious diners. Offering loyalty programs through mobile apps provides another way to reward customers. Consider adding more plant-based options as well, since these appeal to health-focused patrons. The current climate allows you to stand out from major chains. Seize this moment to attract new diners, build loyalty with regulars, and keep your restaurant competitive.

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