Traditionally, the concept of value for money was relatively straightforward, involving the trade-off between price and quality, but it’s not what it used to be, says MCA market insight director Steve Gotham.

Thought for today (and tomorrow) – value for money is just not what it was. Traditionally, the concept of value for money was relatively straightforward, involving the trade-off between price and quality. In essence, value for money was a two-dimensional equation, involving a spectrum between price-led value and quality-led value. In foodservice, and elsewhere, there is an emerging third dimension, and this relates to value for time. Importantly, this opens up a whole new world of operational complexities and interactive opportunities. But also, and given the challenging nature of the times, I wonder whether enough is being done on the core value front?

Let’s start with the original value pillars of price and quality, because just maybe, there is still some untapped potential here to refine customers’ appreciation of the value for money being offered. The example of Greggs being largely price-led can be set against the quality-led stance of Pret A Manger. Both are doing well within their trading spaces and both have successfully diversified their product assortments from a breadth perspective. Depth-wise, however, and adding more price-tiering, there has been conspicuously less interest.

This limited depth is pretty much the case for much of the out of home marketplace. One interesting exception of course is fast food, where some stronger efforts to embrace a good/better/best offering have been made with saver menus, standard ranges and more premium offers. This helps to broaden customer appeal and capture some trading-up spend. Maybe, there is some scope to do more of this, not least in pubs?

For the most part, foodservice brands target a certain space along the price-quality spectrum – most typically between the lower-middle to upper middle reaches – and try hard to execute well and hope they tap into a sufficiently rich seam of customer affinity. Certainly, in comparison with grocery retailing, there is not the same overt level of low price-led competition. I am sure many industry stakeholders might rail with derision at this, but without a significant hard discounter presence, that is growing and blowing chills across the sector, foodservice does not compare. The absence of this sub-channel is worthy of separate analysis, but the key point, is that there is greater overall focus on quality-led considerations in foodservice than in grocery retailing. As such, this directly raises the question, as to whether quality cues are sufficiently appreciated and leveraged?

Within grocery retailing, quality signposts are easier, and might include the manufacturer brand, a premium sub-brand, product packaging and of course, the price. Within foodservice, there are clearly similarities – but several important differences. In many instances, the menu product may not be visible, so messaging via menus and staff are highly important, and include heightened recognition of the value attached by consumers to provenance, seasonality and any unique attributes. It goes without saying that the presentation of the food, multi-sensory perceptions and its perceived freshness will all have a direct bearing; but there will also be quality cues taken from a host of accompanying elements, not least the cleanliness, the look and professionalism of the staff, the impression of the crockery and cutlery etc. that all need continual review and possibly, tweaking.

Now, enough on price and quality, let’s talk value for time. Within grocery retailing, you can go to your local superstore or hard discounter and do your shop. Alternatively, and increasingly, you could opt to save yourself some time and pop into a convenience store or go online and get your shopping delivered. Either way, there is a premium to pay. Within the experiential foodservice arena, I would argue that time is assessed differently, and just possibly, valued more importantly. Consumers are looking for a return on their time investment. They could stay in or go down the road but will take a more favourable view of venues offering memorable and/or unique experiences.

The growth trends in favour of many Asian-led operators are in part a function of consumers not easily being able to recreate the same meal at home. The growth trends underpinning many competitive socialising venues are led by the fun and social experiences generated. The growth trends supporting the rise of assorted market hall concepts relate to the unparalleled combination of choice and convenience available. The growth trends behind better performing pub companies reflect valued mixes of attractive product, entertainment and hospitality. In short, and in summary, they represent time well spent.

Without question, consumers have long-recognised the interplay of quality and price when assessing value for money. My belief is that this is now being supplemented with growing recognition of the preciousness of time, and that more of us are making sure it is spent not just with the right people, but also in the right places. Delivering on value for money may not be getting any easier, but it is getting more multi-faceted – and this presents more levers for skilful operators.