Restaurant Brands Are Launching Higher-Ticket Family Meals To Ease Sales Declines

In 2016, Americans started spending more at restaurants than grocery stores. It was a giant cultural shift illustrating that many of us have simply become too busy to cook much anymore. 

COVID-19 has pushed this pendulum in the opposite direction.  

As restaurants fight for their very survival, losing $100 billion in sales in less than two months, grocery stores are on a completely opposite trajectory. According to Black Box Intelligence, grocery store growth for the third week in March was up a whopping 73.6%, followed by a week in which it was up 15.5%.  

The whole thing presents a bit of a paradox. We’ve spent the past four years not cooking as much and so having to do so all of a sudden can feel a bit outside of our comfort zone. As such, a number of restaurant brands have pounced on a marketing opportunity–a rare silver lining in an otherwise devastating narrative–by introducing meals meant to feed full families for two or more occasions.  

Consider the past two weeks alone: Noodles and Company introduced Noodles Family Meals, while Qdoba launched a new family meal, Buffalo Wild Wings and Carl’s Jr. are both promoting new family bundles, Zaxby’s has new Zax Family Packs, Chick-fil-A launched family meal bundles, Denny’s introduced a family-sized version of its signature Grand Slam and KFC added a new $30 Fill Up meal and a $10 popcorn chicken meal. And so on and so forth.

Sure these meals ease the burden of cooking every night, but they’re also filling a major void on the business side of things. Restaurants that are able to find success with family meals are going to be able to protect their financials a little bit more than others through this crisis, particularly since restaurant traffic just isn’t there right now. It hasn’t been there for weeks. Domestic restaurant transactions were down 42% and 41% for the weeks ending March 29 and April 5, respectively.  

When there aren’t as many customers, there isn’t as much cash flow, so brands are pivoting to entirely different strategy with higher-ticket items. And customers who are kitchen-fatigued are here for it. A new report from Punchh and Hathway shows that despite a massive drop in visits, average order volume is up. Weekly AOV growth continues at 11% growth from previous the previous trend (the first half of March). 

Wingstop has perhaps the strongest case study here. The company released a business update last week that included an anomalous 8.9% increase in same-store sales during the last two weeks in March. CEO Charlie Morrison said that although there has been a “slight decline in overall transactions due to the loss of dine in, growth in our average ticket has surpassed these transaction declines as we’re primarily serving meals for families.” 

Not only are brands better able to leverage higher-ticket items now, they’re better able to capture a targeted group of customers, another abrupt shift from recent trends toward solo dining.

Aaron Allen, chief global strategist at global restaurant consultants Aaron Allen & Associates, said what is happening now is a reversal of what’s been happening for about a decade. In fact, from 2014 to 2018, table-for-one bookings at New York City restaurants jumped by 80%. 

“In some ways, in the face of the pandemic, what we are seeing is a bit of a return to the notion of more souls eating (and sheltering) under one roof, with comfort and convenience still a paramount consideration,” Allen said.  

While grocery stores will unquestionably continue to benefit from lingering shelter-in-place orders, more customers are likely to be attracted to the idea of having restaurants take care of a few meals.   

“Grocery delivery is convenient, but some people might be getting click fatigue of ordering their groceries online and then having to do the cooking and the cleaning,” Allen said. “Brands that are working backwards from a consumer perspective, identifying their problems and how to solve them, are in a better position. Those problems start with providing a one-click convenience for a meal for the whole family.” 

Online orders prior to the pandemic typically generated checks that were significantly higher, for psychological reasons (consumers feel less judged), or other reasons (group orders tend to be placed digitally), which is why many brands migrated so quickly to online ordering. This bodes well for the quick-service and fast casual brands that are left filling the void left by struggling family dining and buffet concepts, concepts that will likely struggle the most during the coronavirus crisis. Enter the fast food family bundle meal.  

“Think about how many family dining restaurants are closed right now that affect families who typically do eat out. This idea of bigger meals from other brands that typically don’t have them makes a lot of sense to fill that void,” Allen said.  

It’s worth noting that the family dining and buffet segments were on a downward trajectory prior to the pandemic, but they fulfilled those “group orders” other concepts are now chasing. Allen believes that bundling and family meals have not been fully expressed domestically, and expects brands embracing those options during the crisis to perhaps continue doing so after.   

“There’s no question some of the changes happening now are irreversible. As the industry heads in the direction of delivery, takeout, convenience, it can’t forget about families, groups, kids’ menus,” Allen said. “Fast-footed operators will reconfigure their menus to hit a broader audience or to more limited, high-ticket, high-margin items. It’ll either be faster and smaller or bigger and better. There won’t be a lot in the middle.”  

For now, however, the path in front of us remains too murky to know for sure what menus will look like on the other side of this. What we do know is that those who have intentionally shifted their focus to higher-ticket items might be more insulated through this crisis than those who have not.  

“Whether sheltering in place as a single or sharing accommodations with family, the check average is increasing to the benefit of those operators attuned to the unique needs and considerations of this modern pandemic,” Allen said.