PHOENIX —Restaurant companies seeking ways to lure new customers are turning to limited-time offers more often to pique guests’ interest and to offer variety to returning patrons.
While LTOs help increase profitability, they are challenging for the restaurant, the distributor and the supplier, said participants in the “LTOs: Drivers for Growth” panel at the Chain Operators Exchange 2008 here. —Restaurant companies seeking ways to lure new customers are turning to limited-time offers more often to pique guests’ interest and to offer variety to returning patrons.
David Cox, president of ARCOP, the Arby’s purchasing cooperative, and the panel’s moderator, said: “I can’t say enough about how collaboration between [restaurants], suppliers and distributors is essential to the success of LTO promotions. LTO management is not easy. All three parties must communicate, share data and be nimble.” —Restaurant companies seeking ways to lure new customers are turning to limited-time offers more often to pique guests’ interest and to offer variety to returning patrons.
Cox added that the Arby’s system supported more than 48 different LTOs in a 12-month period in 2007. —Restaurant companies seeking ways to lure new customers are turning to limited-time offers more often to pique guests’ interest and to offer variety to returning patrons.
“That was over 125 new [stock-keeping units] to the system,” he said. “Without an investment in technology and people, we could not have supported the scope of the Arby’s marketing calendar.” —Restaurant companies seeking ways to lure new customers are turning to limited-time offers more often to pique guests’ interest and to offer variety to returning patrons.
Tad Wampfler, senior vice president of supply chain management for Wendy’s International Inc., said: “We are in the midst of the Lenten season, and Wendy’s doesn’t typically have fish on its menu. Now we do for the Lenten season. Because we don’t have it on the menu all the time, we don’t have a great handle on where it’s going to sell well—where it’s going to be hot, where’s it not.” —Restaurant companies seeking ways to lure new customers are turning to limited-time offers more often to pique guests’ interest and to offer variety to returning patrons.
Wendy’s developed the fish sandwich, a cod product, and started purchasing last year. —Restaurant companies seeking ways to lure new customers are turning to limited-time offers more often to pique guests’ interest and to offer variety to returning patrons.
“We started procuring fish almost a year ago,” Wampfler said. “Obviously, a lot of forecasting goes into that. A big part of us right now is moving product around. You are finding out where it’s really selling. We estimated it would sell really great in Boston, but what’s going on in other markets.” —Restaurant companies seeking ways to lure new customers are turning to limited-time offers more often to pique guests’ interest and to offer variety to returning patrons.
He said Wendy’s relies on technology to help manage supply. —Restaurant companies seeking ways to lure new customers are turning to limited-time offers more often to pique guests’ interest and to offer variety to returning patrons.
“The key is to be able to move product around,” he said. “We have some markets doing 11-percent mix and others doing 3 percent and 2 percent.” —Restaurant companies seeking ways to lure new customers are turning to limited-time offers more often to pique guests’ interest and to offer variety to returning patrons.
Wendy’s technology and information systems allow management to gauge where product needs to be, Wampfler added. —Restaurant companies seeking ways to lure new customers are turning to limited-time offers more often to pique guests’ interest and to offer variety to returning patrons.
While marketing averages a 5-percent mix across the system, he said the franchisee operator only cares about his stores. —Restaurant companies seeking ways to lure new customers are turning to limited-time offers more often to pique guests’ interest and to offer variety to returning patrons.
“The franchisee doesn’t really care about the average, he just wants to make sure he has the product,” he said. “You need technology that gives you insight.” —Restaurant companies seeking ways to lure new customers are turning to limited-time offers more often to pique guests’ interest and to offer variety to returning patrons.
David Parsley, senior vice president of supply chain management at Applebee’s International Inc., said a recent steak promotion proved successful. He said technology that allowed parties to see all the way through the supply chain was crucial to the success of the program. —Restaurant companies seeking ways to lure new customers are turning to limited-time offers more often to pique guests’ interest and to offer variety to returning patrons.
Panelists warned operators to be prepared for what to do if an LTO is very hot. —Restaurant companies seeking ways to lure new customers are turning to limited-time offers more often to pique guests’ interest and to offer variety to returning patrons.
“You are either going to be long or short of product, that’s the only thing we know for sure,” Wampfler said. “You have to be prepared for any outcome.” —Restaurant companies seeking ways to lure new customers are turning to limited-time offers more often to pique guests’ interest and to offer variety to returning patrons.
