Written by Greg Paull, Co-founder and Principal, R3 – It might look like a season for change for quick-service restaurants (QSR) in the US and Canada. Brands from McDonald’s to Burger King, KFC and Tim Horton’s have announced – or are in the process of finding – new agency partners, in creative, media, or both. In the US alone, this might raise questions to why, as QSR brands did well out of the pandemic even with restrictions to in-store dining and significant drops in traffic.
At the onset of the pandemic, QSR was one of the industries to quickly kick digital transformation into gear. However, the next challenge of winning customers in a high-inflation economy requires a different set of skills, which – in many cases — is why QSR brands are looking for better suited partners. Priorities have shifted from sustaining brand awareness in a WFH economy to convincing people to pay more, more regularly.
Communicating value as prices rise
Consumers are facing the highest menu inflation prices in decades as a result of labor and supply chain challenges. Looking at the Economist’s Big Mac Index – which looks at how Big Macs are priced across currencies, the price of a Big Mac increased at the same rate as inflation (7%) between December 2020 and December 2021. Brands have already begun offsetting commodity pressures. Domino’s has downsized its wing deal from 10 to 8 items, and Denny’s has stopped advertising its value menu that starts at $2.