Shop Talk

Retailers, consumers and prices

Diners say Olive Garden, Papa John’s are tops

June 15, 2010

papajohnsPapa John’s and Olive Garden got top marks in their respective restaurant categories in the University of Michigan’s 2010 American Customer Satisfaction Index, while McDonald’s and Chili’s Grill & Bar were laggards.

Papa John’s took the lead in the limited-service category from Domino’s Pizza. Notably, this year’s win for Papa John’s came as Domino’s was getting a sales bump from its reformulated pizza recipe and crowing about how its new pies were beating rivals in taste tests. 

Papa John’s earned an ACSI score of 80 (out of 100), up from 75  last year. Little Caesar, Pizza Hut and Starbucks each made gains versus 2009 and were close behind with scores of 78. Domino’s score of 77 was flat from a year ago. 

McDonald’s, which has outperformed most other quick-service restaurants, was the only major fast-food company to post a decline. Its score fell to 67 from 70 last year. 

“Price was behind much of the improvement, but new products also contributed,” said Claes Fornell, a professor at the University of Michigan’s Stephen M. Ross School of Business.

Pizza Hut offered any pizza for $10, while Papa John’s combined similar pricing promotions with what customers perceive as high quality products.  

“As increasingly frugal consumers have made price more salient, McDonald’s has acquired more customers. These newcomers seem less satisfied, and were it not for the economy some of them would rather eat somewhere else,” Fornell said.

Darden Restaurants’ Olive Garden was the top full-service restaurant chain for the fourth year in a row, rising to 84 from 81 in 2009. Red Lobster, also a Darden chain, was close behind at 83. Brinker International Inc’s Chili’s Grill & Bar came in last among the chains in the rankings, but its score increased to 78 from 74. 

“Olive Garden has long been a leader in value for money, going back to the earliest days with its all-you-can-eat soup, salad and breadsticks and now including offerings such as the ‘Never Ending Pasta Bowl’,” Fornell said.

ASCI conducts consumer interviews from mid-January through March to measure things like perceived quality, perceived value, satisfaction and loyalty. 

Despite the fact that most fast-food operators improved, the ACSI declines for smaller chains and restaurants as well as for McDonald’s were large enough to cause a drop for the industry as a whole, said Fornell.

Both the fast-food and the full-service restaurant categories slid about 4 percent to 75 and 81, respectively.

(Reuters photo)

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