- WHITE PAPERS
How do menu labels affect a restaurant's bottom line? When faced with calorie counts on a menu, do some customers choose to walk out the door? These are questions that restaurateurs are asking as menu labeling legislation continues to move forward.
Thankfully, studies have consistently shown that menu labels do not affect sales, since customers simply choose to "swap" for a lower-calorie menu item. Instead of taking their business elsewhere, consumers who are able to see the calorie information on a menu will usually just choose another item if they feel that the "count" on their normal selection is too high.
Starbucks commissioned a Stanford University study in 2009 to see what the effect of their menu labels in New York City was on their overall sales. The study's authors analyzed transactions between January 2008 to February 2009. They used Starbucks' stores in Boston and Philadelphia as controls, since menu labeling was not yet required in those cities.
The study concluded that if lower-calorie items were offered, customers would often just substitute them for their normal selection. The menu labels led to a 6 percent overall decrease in calories per transaction, but profits did not decrease — meaning that even the customers who opted for the lower calorie item were not spending less money on their transactions.
"There is no impact on Starbucks profit on average," the study states, "and for the subset of stores located close to their competitor Dunkin' Donuts, the effect of calorie posting is actually to increase Starbucks revenue."
What does this mean? Well, according to this study, the presence of competition that did not use menu labels actually drove consumers to buy from Starbucks.
Since June 25, 2013, Starbucks has been providing menu labels in more than 10,000 of its U.S. restaurants, helping to lead the way toward successful menu labeling in restaurants across the country.
A more recent study (June 2013) examined 50 different locations of 10 chain restaurants in King County, Wash. This study also found that the mean calories purchased decreased 18 months after menu labeling was implemented.
While this study did not look into the restaurants' financial data, the authors "suggest that menu labeling" at fast food chains "has the potential to contribute to obesity prevention," which, in my opinion, should be the No. 1 'bottom line' for the food and beverage industry as a whole. Informed diners are empowered diners, and in today's electronic world, I think transparency is a very good thing.