Taco Bell, higher menu prices dominate Reddit conversations
Redditors have expressed grievances over the restaurant’s app functionality and pricing approach.
New data from GlobalData finds that Taco Bell generates 32% of Reddit conversations among the top 10 quick-service restaurants – much more than its peers, with Starbucks at No. 2 with 21% share of voice, and Chipotle at No. 3 with 14%.
Rounding out the top 10 are McDonald’s (13%), Burger King (6%), KFC (4%), Subway (4%), Pizza Hut (2%), Domino’s (2%), and Chick-fil-A (2%). The Reddit conversations were measured from Jan. 1 through Oct. 31, 2023. Why is this important? CNBC estimates the site has about 57 million daily active users who post and consume news and memes, offer general information or advice, or share grievances or praise for brands. Conversations on the site have even impacted market activity, as was the case in 2021 with the abrupt rise in GameStop’s shares. Indeed, Reddit has been one of the fastest growing social networks since the pandemic. Ad revenue is projected to hit over $520 million this year, from $94 million in 2019. The company is targeting a 2024 IPO.
Conversations on the platform about Taco Bell have predominantly focused on dissatisfaction with the brand’s app, including order inaccuracies, glitches, usability challenges, and issues with the loyalty program. Redditors have also discussed the need for Taco Bell to reassess its “value” pricing strategy, GlobalData reports.
Therein lies a benefit of monitoring such conversations taking place on Reddit. The channel provides a unique opportunity for brands to listen and gather data from their customers and understand what they’re saying about the brand – including complaints – and what they’re saying about competitors. Notably, Gen Z is the top age demographic on Reddit, and is a priority target for most brands.
“These multifaceted discussions underscore crucial considerations for Taco Bell’s app functionality, pricing approach, and overall customer satisfaction,” GlobalData notes.
That said, Taco Bell isn’t the only brand being scrutinized for its “pricing approach.” In November, a Reddit thread went viral after a McDonald’s customer in Connecticut was charged $18 for a Big Mac combo meal.
Additionally, GlobalData’s research shows that concerns over pricing have also been a dominant conversation for Starbucks and Chipotle, though Redditors hold diverse opinions on both brands. For Starbucks, positive conversations have emerged about the company’s efforts to achieve operational efficiencies, while some consumers have defended Chipotle’s recent pricing increases, citing inflation and higher operational costs. For context, Chipotle has raised its menu prices four times in the past two years, while the limited-service sector overall has raised menu prices by about 30% since 2019.
Consumers showed a tremendous amount of willingness to accept those higher prices until the end of July and early August. An early August survey from HundredX illustrated that pricing fatigue had begun to take hold around that time, while traffic levels began to drop across the industry. Traffic erosion was a major narrative during Q3 earnings calls, as restaurant prices continue to far outpace general inflation levels. This disparity could drive more consumers toward food-at-home meals and, during a recent interview, Kevin Burke, partner at Franchise Equity Partners, cautioned against further pricing increases in 2024.
“A lot of pricing has been taken and there could be a substitution effect where people can instead go to a grocery store or convenience store. When hogs are high, people buy beef or chicken. Restaurant operators have to be careful not to get to a pricing plateau where you leave people behind out of sheer economics,” Burke said. “Operators have to be much more careful with pricing given the consequences that indiscriminate increases have sent traffic away. When it becomes a secular trend, which it has, it teaches people to be more thoughtful about menu, portion, mix – everything you can do besides sticker shock.”
Source: NRN
