A new report on restaurant loyalty trends from PAR Punchh includes insights of value for convenience-store retailers.
“You can’t afford miscalculated strategies or fail to quickly adopt new market demands,” the report said. “Which means your old playbook and traditional strategies may no longer be effective. To remain competitive, it’s vital to redefine how you provide value to your guests. Building stronger customer relationships through well-crafted loyalty programs can make all the difference.”
In its inaugural Loyalty Trends Report 2024, San Mateo, California-based PAR Punchh, which works on more than 30% of the top 100 restaurant brands’ loyalty programs, presented findings based on millions of consumer data points.
Punchh is part of Par Technology Inc., a New Hartford, New York-based restaurant technology company and provider of unified commerce for enterprise restaurants.
Loyalty
One finding of note to c-stores is the surge in loyalty sales across all segments from 2022 through 2023.
“Loyalty members helped brands recover faster from the effects of the pandemic and continue to drive valuable growth for every segment,” the report said.
Quick-service restaurants (QSRs), the biggest foodservice competitor for c-stores, enjoyed year-over-year growth of 10% from 2022 through 2023, “a testament to QSRs continuing to innovate in 2023,” the report said.
In 2023, while dine-in restaurants remained a popular destination for customers, “QSRs utilized their loyalty programs to engage their members on new channels such as through mobile ordering or redesigned their programs to enhance their value proposition to forge a stronger brand relationship,” the report said.
Among casual, fast-casual and quick-service restaurants, QSRs saw the greatest visit increase at 7.5% year over year, the report said.
This growth is a reminder that c-stores have to remain aggressive in their strategies, and the factors that helped QSRs are all areas in direct competition with c-stores. The report stated, “Several factors contributed to QSR brands’ ability to increase visit frequency in 2023 including typically lower menu prices relative to other segments, menu innovation, value pricing, investment in mobile ordering apps, greater deployment of kiosks and additional off-premise ordering channels, and new initiatives to drive morning daypart traffic.”
Dinner
Highlighting the challenge for c-stores is the fact that dinnertime is outpacing all other dayparts for QSRs.
“QSR customers are aware of the convenience that this segment offers and understand that if they need dinner quickly, they can always rely on a QSR restaurant being available and ready to serve,” the report said. “Additionally, QSRs are typically predictable, and customers know what to expect, including speed of service, menu items and consistent taste. As a result, their dinner decision is much easier for them, resulting in QSRs achieving 56% of sales coming from the evening daypart.”
Breakfast
Another challenge comes during breakfast and is a warning for c-stores that they must keep on their toes to avoid losing market share.
Casual dining brands embraced a few key strategies including menu innovation with new and healthier breakfast items, personalized offers to drive more frequent visits, and optimized channels for ordering and delivery to successfully drive interest in the morning, the report said.
An emerging trend across all segments was the growth in sales for the morning/breakfast daypart, the report said.
“In 2023, about 88% companies mandated employees return to in-person work at least two to three days a week, and by the end of 2024, 90% of companies are expected to have return-to-office policies implemented, according to recent research,” the report said. “Many brands adapted their morning offerings to align with customers’ new schedules and rhythms and drove interest in this daypart through strategic loyalty initiatives.”
For casual dining chains, 7 a.m. started the morning rush in 2023, the report said, and this segment drove an “impressive” 62% increase in morning sales.
In October 2023, QSR and fast-casual menu prices were up 6.2% compared with casual-dining chains, which only saw prices rise 4.3%, according to the U.S. Bureau of Labor Statistics’ consumer price index. Casual dining brands seized the opportunity to leverage this pricing difference and began to gain traction into morning business, which typically is dominated by QSRs and fast casuals.
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