When fast food feels out of reach: How to win back customers after years of rising prices

Since 2021, the world has been grappling with inflation, and the fast-food industry is no exception. European markets have seen fast-food prices surge between 17% and 52% since 2021 (SKIM industry research, 2024). Even as inflation begins to stabilize, consumers are challenging whether fast food is still worth the cost. Price sensitivity is more pronounced than ever in the fast-food sector. Consumers are more aware of what they’re paying for their meals than they were at the start of 2023. With less disposable income due to inflation, an average of 34% of consumers report eating out less frequently, likely due to price hikes.

Fast food was once a go-to option for even the most budget-conscious consumers. But after years of increases, many have already traded down to more affordable options. What happens when even fast food is out of reach?

The problem: Fast food is no longer affordable

Fast-food restaurants need to entice customers back without resorting to simple price cuts. They need a compelling reason for consumers to reconsider their perception of the industry. But what’s the solution? Promotions? New products? Menu optimization? Brand messaging? The answer lies in providing value to the consumer.

Due to high inflation, consumers are now hyper-aware of fast-food prices. This trend is widespread and has led to a shift in what value means to them. It’s no longer about spending as little as possible, but about getting the most value for their money.

The answer: Restore value for the consumer

A fast-food restaurant’s value strategy should be independent of its price position. Price doesn’t equal value. Fast-food restaurants need to focus on convincing consumers that they’re spending their money wisely and getting the most out of every pound, euro, or dollar. This isn’t a quick fix achievable through promotions; it’s a long-term brand identity enhancement that keeps customers coming back.

How to re-establish your value strategy

Successfully improving a fast-food restaurant’s value strategy hinges on two things: consistency and signature items.

Consumers now crave consistency much more than before, knowing they can buy the same product or meal repeatedly at the same price. Consistency demonstrates a brand’s commitment to value and makes fast food a safe, predictable option.

The other key is favorites. Don’t reinvent the wheel, maybe just change the rims. Consumers aren’t prioritizing new products right now. In fast food, new, especially cheaper, products are often associated with shrinkflation or lower quality.

Instead, fast-food restaurants should focus on delivering favorite products in a more value-driven way. We know price cuts aren’t an option, but there are other levers to pull. The most successful approach is creating new and different bundles of the same products, changing the proposition and price point while keeping favorites front and center.

Offering options for favorite products in new ways provides the consistency consumers seek. By making these permanent menu additions, consumers have a clear beacon when looking for value, and consistency makes it an easy, repeatable choice.

Another strong method is using pricing anchors – these are set prices on popular items that stay the same for a long time, even if other prices change. These have become rare due to inflation, and consumers would welcome clearly signposted stability. This is the simplest way to communicate value, but it should be a long-term measure. There’s a risk to consumer loyalty if a brand establishes an anchor and then quickly abandons it. If your brand can commit to a price anchor for at least 18-24 months, it can be a powerful tool for rebuilding trust and establishing long-term value.

An expanded value strategy

Once a consistent value strategy is in place, other promotional levers can be used. Each lever has a unique outcome. The question becomes: How do we drive acquisition versus retention? The value strategy is your lighthouse, but customers still need to find it.

Drive acquisition with short-term promotions

Short-term discounts have their place, especially in the competitive fast-food space. The challenge is using them effectively without sacrificing value.

Many of the learnings from the value strategy can be applied to short-term promotions – especially when it comes to the types of products that should be used, and unsurprisingly, favorites are the best choice. Make the consumers’ choice to come back to a fast-food restaurant as frictionless as possible. Using new or unpopular products, regardless of the discount, only adds a layer of decision-making that consumers don’t want.

The most successful promotions directly communicate a discounted price point. Use consumers’ price sensitivity to your advantage by showcasing a clear discount to the normal price. Percentage discounts aren’t as effective as they require additional mental effort.

Ensure repeat visits

Short-term promotions won’t foster long-term loyalty due to their uncertainty. They’re a tool for acquisition, not retention.

Most long-term retention should stem from the value strategy – the lighthouse. Once established, focus on converting infrequent visitors into loyal customers. A loyalty program aligned with consumer interests is key to achieving this.

In fast food, the balance is between encouraging future visits and not overdoing delayed gratification. Offers requiring four or more visits don’t usually perform well. These are more effective in other areas such as coffee shops (because caffeine consumption is incredibly consistent!). Fast-food consumers struggle to see the value when the reward is too distant.

Loyalty isn’t just about discounts; it’s also about exclusivity. Incentivize loyalty with unique gifts or products that money can’t buy.

3 key takeaways for fast-food restaurants

The aim is not just short-term acquisition, but also long-term retention. The goal should be a strong, value-first brand image that provides the consistency and value consumers crave. Here are our key takeaways:

1. Create new, unique combinations of your best-known products and establish pricing anchors to reinforce this image.
2. Launch short, limited-time promotions focused on specific price points and beloved products to drive further penetration.
3. Introduce a carefully crafted loyalty program that rewards subsequent visits and provides exclusivity to turn them into loyal customers.

It’s a challenging landscape to navigate, but re-establishing the core reason why consumers should choose your brand and offering them stability and value is a great place to start.

To learn more about this approach, schedule a consultation with our experts.