Tuesday, October 21, 2014

Price Wars

Being in retail, my ears perked up when I heard about the newest level of price wars between fast food giants McDonald's and Burger King. Last week Burger King announced a dramatic cut in the cost of it's Chicken Nuggets. Burger King is now offering a 10 piece chicken nugget for $1.49. This comes on the heels of McDonald's ultra popular Monopoly game, which has proven to be a traffic driver for the food mecca. So what does McDonald's do? McDonald's "sees" Burger King's $1.49 10 piece Nugget and "raises" with a $5.00 20 piece nugget, plus offers the fan favorite Monopoly game to boot.

What does all this mean?

It means that in the proverbial pie of fast food sales, there are only so many pieces. The loss leader in competitive sales has become an every day thing. So what does all this mean for a little guy like me? It means a heck of a lot and here's why:

  • Retailers make 30% of annual revenues during the holiday season. WHAT THAT USED TO MEAN: Shoppers will shop. Period. WHAT THAT MEANS NOW: Retailers need to attract the customer. Even loyal customers.
  • For most retailers, the Internet has changed the way we do business. Heck, the internet has changed the world but for retailers that means there is a World Wide Web of competition out there for goods. We must stay competitive to stay in the game. So how do we do that?
  • Black Friday used to be the busiest shopping day of the year! Thanks to "Door Busters", Black Friday sales and deep discounts, retailers have to have a strategy to make their numbers and that spells out DISCOUNT
  • More sales and discounts are a necessity and are now commonplace in a sales plan. And more frequently that ever before.  

It's amazing to me that even the big guys like McDonald's worry about market shares.I'm aware that they, of course, worry about staying on top and I know that we all worry about the bottom line, but I am surprised to find that the biggies and I share a common ground. It's the new age of competitive sales and in this Internet world, nothing is for sure. Service and reputation are a big part of it, but the facts are what they are. If you can't attract the client to your location or your website or your restaurant, you are all done.

The bottom line now means that they won't buy if they don't come. 


MarkD60 said...

Extra good deal on shit? who cares. People are idiots.

the walking man said...

I do 11/12ths of my shopping January to November, I rarely see an uptick off the cheap space in the dial in December.