Fast-food restaurants redefining value

by Monica Watrous
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Burger King 5 for $4 value menu
At Burger King, the new 5 for $4 deal offers five items for $4, including a bacon cheeseburger, small fries, small drink, four-piece chicken nuggets and a chocolate chip cookie.

KANSAS CITY — The dollar menu is not dead, but it may be on life support. Fast-food restaurants are redefining value with new propositions for the New Year.

At Burger King, the new 5 for $4 deal offers five items for $4, including a bacon cheeseburger, small fries, small drink, four-piece chicken nuggets and a chocolate chip cookie.

“When we continually deliver upon our business strategy of bringing people into our restaurants with great tasting food at an accessible price point we win with our guests and our franchisee partners,” said Alex Macedo, president, North America, for the Burger King brand. “Our new 5 for $4 deal continues to build upon that winning strategy.”

The promotion smacks of one-upmanship on the heels of rival Wendy’s latest meal deal: a 4 for $4 offer that includes a junior bacon cheeseburger, four-piece chicken nuggets, fries and a drink. The chain, which launched the promotion this past October, said early results of 4 for $4 have been promising.

“Our goal with this promotion is to complement our high-end messages with a program that will drive profitable customer count growth, and we are very encouraged by the customer count growth we are experiencing,” said Emil Brolick, president and chief executive officer, said during a Nov. 4 earnings call. “We expect that this will be the first of several value bundles that you will see us use in concert with high-end, core, and (limited-time offer) messages.”

McDonald's 2 for $2 value menu
The new McPick 2 menu includes a chicken sandwich, a double cheeseburger, small fries and mozzarella sticks.

And then there’s the new McPick 2 menu at McDonald’s, which for $2 includes two items from a selection of a chicken sandwich, a double cheeseburger, small fries and mozzarella sticks. As described by Mike Andres, president of McDonald’s USA, during the company’s recent investor meeting: “The new platform will not be tied to a singular price point, but it will enable our customers the opportunity to bundle their own meals to suit their desire, which they have indicated to us is very important to them. Our overall goal with our value strategy is to first and foremost offer items that our customers want, to allow them to choose while still contributing to restaurant guest traffic and profitability.”

Sonic’s new Two Can Eat for $9.99 deal features a choice of two foot-long hot dogs or cheeseburgers, two medium tater tots or fries and two medium drinks.

Even Pizza Hut has introduced its version of a value menu with the $5 Flavor Menu, a selection of items that includes a medium one-topping pizza, eight bone-out chicken wings, a Hershey’s chocolate chip cookie, a Hershey’s triple chocolate brownie, Tuscani pasta, a double order of breadsticks or flavor sticks and four 20-oz Pepsi beverages for $5 each when ordering two or more.

“Consumers consistently give us credit for having great-tasting, flavorful food and now we are able to offer it to them at a price that enables them to say ‘yes’ every day to Pizza Hut,” said Jeff Fox, chief brand and concept officer, Pizza Hut. “Value menus don’t really happen in the pizza category.”

Expect more restaurant companies to announce new value platforms this year, said Bonnie Riggs, restaurant industry analyst for The NPD Group, Chicago.

“Much to the chagrin of many restaurant operators, value wars are back,” Ms. Riggs said. “Many others will likely have to follow suit to compete in the battle for market share among value seekers, of which there are many.”
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