Meal deals gain fast casual presence

Everywhere consumers turn, retailers and restaurateurs are touting the value of a dollar. That doesn't mean all fast casuals are going by way of McDonald's and Burger King, but it does mean operators are recognizing the importance of strategically priced menu items.

Quiznos, Boston Market, Togo's, Daphne's Greek Café and Moe's Southwest Grill have all within the past year launched menu items priced at $5 or less.

Fast casual operators have built their businesses and their reputations on quality products, distinctive atmospheres and décor. And more recently, reduced portion sizes have played a role in the shaping of fast casual menu items.

Moe's launched its Joey Jr. value meal in early January for the price of $4.99. The meal, which features a snaller portion size than its other menu items, includes chips, salsa and a drink.

"We definitely don't want to compete with QSRs and we feel like, for us, the way Moe's defines value is the quality of the products as well as the portion size," said Sara Riggsby, Moe's director of marketing. "In terms of pricing strategy, it helps people keep us in mind as a place where they can eat affordably, but it's also not trying to compete with the dollar menu because we've got a quality product."

The Joey Jr. – once a staple on Moe's kids' menu – has moved to the adult section, where it will remain until the value meal deal ends in February.

"We found a lot of adults were ordering kids' meals," Riggsby said. "We wanted to make it easier on the adults and also provide a kids' portion, so we reduced the kids' meal size as well. It also allowed us to lower the price for the kids' item."

According to the National Restaurant Association's 2009 Restaurant Industry Forecast, the top trend for both full- and quick-service restaurants is expanded focus on value. Restaurant customers interviewed by the association in November 2008 said they would frequent a full- or quick-service restaurant more if it provided a variety of dining discounts. Other top draws included smaller portions for a lower price.

Smaller portion sizes can lead the way for ticket add-ons, even when a customer orders a meal or bundle.

For example, Daphne's Greek Café offers several low-priced side items, including dessert.

"The goal is not to reduce the check average, but provide items that would ideally add to the check," said Darren Tristano, executive vice president of Chicago-based consultancy Technomic. "It also allows them to serve these (items) while the customers are waiting for their food to be cooked. It helps the experience along."

The absence of beverages from some meal bundles also serves to drive check averages without making customers feel shortchanged.

As a thank-you to its valued customers, Pat & Oscars is introducing a 32-ounce cup, called their Survival Kit. The company plans to sell the cup for $2.99 and then customers can fill it for free for a year. Although it isn't quite adding to a guest's check average, it is designed to get them through a tough economic year.

"Guests who come to us all the time, we want to reward them, but I think it brings value to the table," said Pat & Oscar's president John Kaufman.

The company also rolled out a meatball sandwich value meal, which became the brand's No. 1 seller in two weeks, and is looking into the addition of bottomless breadsticks and salads. Similar to Daphne's concept of inexpensive side items, Pat & Oscar's also is testing starters and desserts in five locations.

"The other side is we're really pushing the food costs and working our operations so we can maintain our price point," Kaufman said. "We have an obligation to our guest to hold our value."

While customers will continue to seek out value menu items throughout 2009, some operators remain wary of being lumped into the same category as QSRs. An excessive focus on discounting, they say, can create that perception and degrade the fast casual experience.

"Camille's Sidewalk Café's marketing strategy has never included discounting tactics. Instead, we focus on adding value to our guest's experience," said David Rutkauskas, Beautiful Brands International founder, president, and CEO. "Our offers encourage customers to bring a friend or share Camille's with someone who's never been to our café before, rather than implementing temporary discount offers or "combo" deals, which are geared toward the fast-food crowd."