I think customer behaviour during Eat Out To Help Out (EOTHO) has been fascinating and has fallen into three main categories:
This customer has used the scheme as an opportunity to visit their usual pubs and restaurants, and spend more. This has happened, I suspect, across the whole of dining spectrum from quick service restaurants to high end.
I see this very much though in the gastro-pub/high-end casual dining space, particularly in those where the atmosphere hasn’t changed much in response to covid-19 precautionary methods. They haven’t introduced masks for their teams, temperature checks, roundels on the floors, in/out for toilets or stripes marking one or two-metre distancing, but they have allowed for social distancing and hand sanitisers. They are trusting their customers to take personal responsibility for keeping themselves and others safe.
Dining in these places still feels like an experience but with better value than before because the EOTHO discount has helped customers to eat/drink more, including starters, desserts and more drinks) for their usual spend per head. The end of the EOTHO scheme is not going to discourage these customers from visiting again but they may go back to their old frequency patterns.
Operators here need to be very creative in making these guests feel special – not by giving them discounts but by offering value and uniqueness.
EOTHO has given this group of customers the opportunity to trade up to somewhere they may have gone to only infrequently previously (or events, special occasion and celebrations) rather than a regular monthly visit. So, Café Rouge customers may have traded up The Ivy (if they were able to get in) or Pizza Hut customers might have booked at TGI or for… well, you get my drift. They are spending what they would do so regularly but are now having a very different experience for that money.
This has meant that many brands and businesses have seen brand new customers appearing during EOTHO. One operator told me that more than 40% of their customers were new to them due to the initiative – fantastic for CRM and marketing activities.
Without these activities, they are very likely to fall back into their “old” dining-out habits but potentially keep some spend in reserve to go back to their memories of August 2020. Marketers need to remind those who have traded up to their brand how wonderful their business is and how it is worth the additional spend in normal times – or discount back to something like EOTHO.
This scheme has given millions of people, the opportunity to eat out (not necessarily drink out) for the first time, not only for many months, but maybe for many years.
A twin pack of rib-eye steaks is £6.89 in Aldi, chips are 90p a bag and peas are currently at a sale price of 55p a bag. So a rib-eye steak meal for two from Aldi is £8.34p. A rib-eye steak meal for two from Beefeater is £38.58p. That’s more than £30 difference. That’s a pair of shoes or a coat or a school uniform.
In my personal experience, Beefeater has taken all personality out of its restaurants in its desire to be “safe” – it’s a very functional experience. I am sure they are not the only casual dining chain to have done so and to have de-personalised the experience. Why would anyone sit in an impersonal space with no atmosphere and spend a minimum of £38 for a meal for two? Almost five times more than they would spend at home… and what does that say about the margins being expected in some businesses?
EOTHO though has taken this meal for two down to £18.58 – about £10 more than cooking at home. That suddenly becomes relatively affordable. It’s worth paying even if the occasion is “I have had enough of cooking at home – get me out of here”.
The moment EOTHO is withdrawn though and customers have to pay a “normal” price, it seems unlikely they will flock back. They will revert to norm. Certainly while the current crisis continues and the customer experience is devalued in some chains, discounts here are going to have to be the norm. If not, the customer is likely to perceive that they are simply not affordable or good value for money and they will not visit.
EOTHO has been terrific for this sector, for our teams and for our customers. The purists would say that it only devalues the market. I don’t think it does but it must make us stop and think why customers eat in our restaurants and pubs and how much they think it’s worth paying for that experience.