From price hikes to shrinkflation: Leveraging empathy to enhance consumer revisit intentions in the restaurant industry during inflationary periods

The restaurant industry in the United States has faced severe challenges in recent years due to inflationary pressures. Drawing on the empathy marketing, the present study explores how consumer empathy can help restaurants navigate inflationary periods and sustain consumer revisit. Specifically, applying the equity theory, the study demonstrates that consumer empathy can lower the anchor consumers use to evaluate perceived sacrifice, and thereby preserving revisit intentions. The study also examines the role of transparent notifications in moderating this relationship, comparing the effects of price hikes versus shrinkflation strategies. The results reveal that transparent communication helps enhance the empathy in the condition of shrinkflation strategies. In contrast, notification has no such effect for price hikes. These findings highlight the unique characteristics of the hospitality industry, offering novel theoretical insights into the psychological mechanisms of empathy marketing and practical implications for restaurants seeking to retain consumers during inflationary periods.