M&C Allegra Foodservice director of insight Steve Gotham discusses why –when it comes to menus – too much choice might just be a bad thing.
So exactly how would you like your burger? With bacon, with blue cheese, with classic cheese, with cheese and bacon, with barbecue pulled pork, with mushrooms, with onions, with relish, with salad, or if you really fancy it, with an extra patty? And of course, to follow you could always have a coffee, but then again, would you like your latte tall, short, skinny, decaf, flavoured, iced, spiced and maybe, with an extra shot!
There is a seductive line of thinking that says offering more options will attract more customers and translate into more sales. The danger, of course, is that operators go past the point of attraction and offer too much choice. The tricky thing is knowing where exactly that point is.
As options multiply, there is a point at which the effort required to distinguish sensibly between alternatives outweighs the benefit of the extra choice. “At this point”, writes Barry Schwartz in The Paradox of Choice, “choice no longer liberates, but debilitates”. In other words the fact that some choice is good doesn’t necessarily mean that more choice is better.
Across the pub and restaurant marketplace, and leaving aside the multitude of options generated by assorted combinations of burger and pizza toppings, the highest menu option counts are offered by pub chains. And coming in with a whopping total count of almost 140 food options, Sizzling Pubs heads the ranking. This M&B brand is currently followed by Wetherspoons with 124 and then Flaming Grill at 110. There is of course, something of a common thread here with a consistent price-led, value market positioning. Indeed, it is interesting to scrutinise the pub market in more detail here. Leaving aside the carvery businesses, there is evidence of negative correlation between menu counts and market premiumisation, with the likes of the more upscale Young’s and Fullers pubs coming in at only around the 40 option mark – and sometimes, in more compromised sites, close to half this.
Looking at this in terms of trading performance, with stronger comparable sales growth typically emerging from the more premium end of the pub market, there is the suggestion that concentrating on doing less really well is proving a more compelling business strategy. Underpinning this is the importance of aligning with prevailing consumer sentiment, and certainly in the south-east, where there is growing consumer interest in more premiumised indulgence, a more focused offering is a winning formula. So it is tempting to argue that too many value pubs are bewildering consumers with too much choice, and at the same time, potentially damaging their brands with consumer perceptions that product quality is being compromised as they cover too many product bases.
Maybe there are some deeper fundamentals at work here, with optimal ranging that strikes at the heart of what good branding practice is all about. The best branding is based on deep customer understanding and it is as much about the customers a brand does not target as it is about those it does. And editing the product offer and customer choice is at the heart of this. The key message has to be that choice is not really about quantity, but relevance.
Expanding the target market for a brand requires a dilution of its core essence to widen appeal. There might be a short-term gain in sales, but the worry is that this is followed by a dilution in performance. The observation could be made that when retailers expand their product ranges it is a potential sign that the business is not close enough to its customers and needs to hedge its bets as a consequence. When looking across at grocery retailers with their hypermarket formats, this expansion is now proving an expensive over-estimation of consumer loyalty. But the grocers can of course sublet and downsize, and have other store formats, not least c-stores, and online channels to drive growth. Such options are not so readily available to pub groups?
The point can be made that offering too many options can undermine the essence of the relationship between the brand and the customer. Critical to the success of every retail business is its capability in ranging on behalf of its customers. Underpinning this is an understanding of what a brand’s customers want – and what they do not want. Retailers of all guises need to get better at delivering greater relevance. Skilful range and offer editing lies at the heart of this. And the reward is enduring customer brand affinity.
Within our Pub Brand Monitor, a new quarterly tracking of consumer perceptions and attitudes towards managed pub chains and pub segments, we are able to look at how pubgoers rate their last eating out occasion at different operators across 14 key performance indicators. These include menu choice and, significantly, the highest ratings in Q1 2015 are for premium pubs at 8.54 (out of 10), followed by mainstream (8.42) and then value (8.24). These segments are based on food & drink spends per person of value (under £12.50), mainstream (£12.50-£25.00) and premium (over £25.00). With key performance indicator scores, 1 = poor and 10 = excellent.
So it would appear that while value chains are offering extensive choice, they are not necessarily being recognised as such in consumers’ minds. The danger is they are locked into this approach due to a competitive imperative, regardless of whether it might be counterproductive. However, M&C Allegra predicts greater operator recognition of this. Indeed, menu count cuts have already been seen at Hungry Horse in the past year, and other chains will follow. M&C Allegra forecasts that modest cuts in menu option counts will be the main direction of travel for menu architects across the pub market, but selectively among casual restaurant chains too. Less choice, but more relevant choice, is the expectation – and better quality offerings too!
The information contained in this article comes from M&C Allegra Foodservice’s Pub Brand Monitor. For more information contact Gareth Nash on gareth.nash@mcallegra-fs.com.
