As food prices continue to rise, bold promotional strategies are becoming a key tool for restaurants looking to maintain customer engagement and drive revenue. According to the latest MOBI Index, the price of food sold in restaurants increased by 4.3% in September 2024 compared to the same period last year. However, as demonstrated by Zambrero’s recent Free Burrito Giveaway, smart, limited-time promotions can offset these challenges by delivering big results for quick-service restaurants (QSRs).
While rising costs can often mean tightening margins, bold promotions can help restaurants stand out and encourage consumer spending, even in a competitive and price-sensitive market.
Zambrero’s Free Burrito Giveaway: Turning Bold Moves into Big Payoffs
Amid these economic pressures, Zambrero, a global leader in Mexican-inspired dining, ran a daring Free Burrito Giveaway on September 25th, 2024, offering 300 free burritos from each of their 300 stores. Despite the rising food costs, the campaign was a major success, showcasing how QSRs can benefit from audacious promotions even during periods of inflation.
Here are the highlights from Zambrero New Zealand’s promotion:
- 66% boost in online ordering dollar sales: Despite the free giveaway, Zambrero experienced a 66% increase in sales compared to average sales volumes. The promotion brought in more foot traffic, and customers supplemented their free burritos with additional purchases like drinks, sides, and paid meals.
- Explosive customer signups: Zambrero recorded 10x the number of MOBI online ordering customer signups in the days leading up to the giveaway. On the day itself, new customer signups surged by 125x, creating a long-term opportunity for customer engagement through loyalty programs and targeted marketing.
- 56% increase in paid burritos: Interestingly, Zambrero’s promotion also drove 56% more paid burritos sold than on a regular Wednesday, demonstrating that offering something free doesn’t necessarily cannibalize regular sales.
Niki Gassett, Senior Digital Marketing Manager at Zambrero, reflected on the success of their bold move:
"We knew giving away 300 burritos per restaurant was a risk, especially with rising food costs, but the results speak for themselves. Our stores were buzzing with activity, and the sales boost was incredible. It’s proof that sometimes you have to be bold to see big results."
John John Edgecombe, General Manager of New Zealand at Zambrero, comments on calculated risks: “It was important to Zambrero that we celebrated this milestone by being generous with our customers. The 300 free burrito celebration had some risk but in today’s ultra-competitive, value conscious landscape you need to stand out so that was a risk we were excited to take. The numbers so far speak for themselves—a 66% boost in sales, 125x more signups, and even a significant lift in paid burrito sales on the day. It’s proof that generous, well-executed promotions grow engagement and boost revenue. We’re excited to watch the results of this promotion compound over time and apply learnings from the 300 restaurant celebration to future campaigns."
Why Bold Promotions Matter, Especially Now
The success of Zambrero’s promotion highlights a crucial takeaway for the hospitality industry: bold, time-sensitive promotions can be a powerful way to counterbalance economic challenges. Here's why they work:
- Capturing Attention in a Crowded Market: With food prices rising across the board, consumers are being more selective with their spending. Promotions like Zambrero’s free burrito day create buzz, excitement, and a sense of urgency that draw customers in despite rising prices.
- Driving Incremental Revenue: While free giveaways may seem counterintuitive during times of inflation, Zambrero’s 66% sales increase proves that customers are willing to spend on extras when they’re already in the online checkout or restaurant for a free offer.
- Building Long-term Loyalty: The 125x increase in new customer signups offers a clear path to future engagement. QSRs can convert these new customers into loyal repeat visitors through personalized follow-ups, exclusive offers, and loyalty programs.
MOBI Index Insights: Inflation and Its Impact on Hospitality
As the data shows, promotions like Zambrero’s giveaway can effectively generate traffic and sales despite these cost pressures, helping restaurants not just survive but thrive in a challenging economic environment.
According to the MOBI Index, which measures changes in prices across the hospitality sector, September 2024 saw a 4.3% increase in restaurant food prices compared to September 2023. With the costs of ingredients and operations rising, many restaurants face pressure to either raise menu prices or find creative ways to keep customers coming back without cutting into their margins.
Shifting Demand for Eating Out
In September, the MOBI Index shows a -6.9% drop in demand for dining out compared to last year, aligning with a gradual decrease in order frequency over the past 12 months. However, as the southern hemisphere moves out of winter and into the warmer months, we anticipate a potential rebound in dining activity. While consumers have been dining out less frequently, spending per visit has remained steady, and the demand for online ordering continues to rise, driven by the need for convenience. This presents an opportunity for hospitality businesses to adapt to shifting consumer preferences and capitalize on the upcoming summer season.
About the MOBI Index
The MOBI Index leverages over 43 million orders from their comprehensive analytics across 7,000 hospitality businesses since 2018, to provide in-depth insights into economic and industry trends. MOBI’s data-driven approach helps illuminate the underlying factors affecting the economy, offering valuable information for policymakers, businesses, and the general public.
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