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Monday, November 20, 2006

Value Added Meals

In lieu of cutting menu item prices, many companies decide to bundle several popular menu items into a value meal. When I lived in Montreal, we often ordered the table d'hote option at dinner restaurants. These prix fixe dinners typically included a soup or appetizer, an entree with vegetables, dessert and coffee. If ordered separately, the total price of these menu items would be higher than the house's suggested meal.

Customers may actually spend more money on the table d'hote option. Most people do not order four or five courses during their restaurant visits. By enticing these customers to order a full dinner at the reduced price, the savvy manager may exert an upward pressure on the check average.

If you can change the dynamic and increase customer spending through a perceived value meal, higher revenue and increased cost control may be the result. Prix fixe options are typically limited. Restaurant managers select the table d'hote options carefully each day.

In addition to attracting more dollars from current clientele, new customers may try your restaurant.

The QSR segment offers both value meals and value menus. Value menu boards are loaded with many low cost selections which may be combined to create a meal. Their value meals are constructed around a larger beverage and an extra item (usually fries). Value meals have a set price. The value menu board options may be ordered in any number the customer desires.

I like their value meal strategy far more than the value menu boards. You can work hard to construct attractive and profitable table d'hote meal options. Your check average and food cost will be more predictable and stable.

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