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Restaurants, changes and the economy

Adweek reported last week that 10 major restaurant chains are reviewing their ad agencies and looking to shake up their marketing strategies to bolster sales in a flagging economy. According to data from NPD Group, the changes may be none too soon. Restaurant traffic declined 0.4% in the second quarter of the year, after three quarters of 0.4% to 0.5% gains, NPD said Monday. Sales rose 1.5% in the spring period from April through June, but pretty much all of the additional revenue came from higher average checks. Also on Monday, Bloomberg reported that restaurants have been raising prices for the past year in an effort to keep up with higher labor costs, indicating that much if not all of the rise in average checks stemmed from higher prices.

The last time the economy tanked, eateries responded by serving up bargain meals that drove traffic but did little to boost sales and profits. Since then, many have been gearing up to take a different approach to boosting sales.

Chains searching for new ad teams and investing in new branding messages hope to find the magic recipe that will draw in new diners without alienating the old, a challenging task made tougher by the fact that even with new agencies, restaurants looking to rebrand often fall back on traditional “food porn” ads rather than true innovation, one agency executive told Adweek. “It’s actually tough to build brands because a lot of people resort to ‘wet meat’ advertising,” said Avi Dan of Avidan Strategies.

Other chains are aiming their changes directly at the menu and winning buzz for it, including Darden, which last week hosted first lady Michelle Obama in a news conference announcing plans to make its children’s menu healthier and reduce calories and sodium levels in existing dishes by 10% during the next five years and 20% by 2021 at its chains, including Olive Garden, Red Lobster and LongHorn Steakhouse.

At Wendy’s, where same-store sales have been in negative territory for six of the past 11 quarters, the team has been working to reformulate the chain’s signature burger for about two-and-a-half years. The chain released the Dave’s Hot ‘N Juicy burger this week. The Associated Press detailed the process of creating the new burger, which began after surveys of about 10,000 customers revealed that they liked the food at Wendy’s but felt the menu hadn’t changed with the times.

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