Would You Like Some Chips and Salsa With Your Stimulus Burrito?

by nicole ~ July 10, 2008

Earlier this week The Today Show featured a financial segment challenging a family to cut their budget in half for one week. Among other expenditures they gave up lawn mowing services, pedicures and eating out.  While not all families get regular lawn mowing service or pedicures, most eat out, at least on occasion.  Now that economic times are tough, restaurants are starting to feel the pinch and starting to get creative.

According to this BrandWeek article, Qdoba Mexican Grill is offering a “burrito stimulus” package.  In their “Love ya Back” campaign Qdoba has reduced the number of entrees one must buy before getting a free one from ten to five. This campaign stands out to me since I’m already a proud Qdoba card holder and now don’t have to think “wow I’ve eaten 10 burritos already!” next time I get a free one, however, Qdoba’s tactics are not unique.  You’ve probably had Subway’s five dollar footlong jingle in your head at some point this spring, and have read an article about Starbucks this week.  As a matter of fact, after Starbucks’ announcement to close 600 stores, AdAge reported on the summer samples and discounts they are offering. 

The question at hand is whether or not these promotions will work. I might be a little more inclined to go to go to the new Qdoba opening in my neighborhood, but I’d probably go anyway. It seems to me like this is a good time to help out old customers, but I’m not sure any of these chains will really gain any new regulars during tough economic times.  As noted in the AdAge article:

“It’s a difficult thing for a premium brand to price-promote,” said Robert Passikoff, founder of Brand Keys. ‘With those kinds of tactics, what generally happens is you end up with a short-term bump, but after the promotion is over, you lose the customer base.”

Regardless of whether or not these promotions work, it will be interesting to see how many other restaurants (and retailers in general) adopt this kind of promotion.  I’m really hoping for a “stimulus pair of shoes” but until then…I’ll enjoy my burrito.

Nicole Amato is an Account Executive at Mediashop PR and a graduate of Northeastern University with a BA in Journalism.