Fast-food value meals return to menus, but the deals aren’t as cheap
After nearly two years of being underground, fast-food value offers are now back and in full force. But they do look different.
Little Caesars has increased the cost of their $5 Hot-N Readyy pizza for the first time since more than 20 years. After four years, Popeyes’ Big Box Deal is back. This time around it’s an additional dollar for the value meal. You can also find these other great deals at And Domino’s PizzaOnly digital customers can get the $7.99 deal
Restaurant chains have been forced to adjust their value menus in order to keep up with rising labor and food costs.
This is an extremely promotional month. Peter Saleh, a BTIG analyst said that January and February are traditionally the months when promotions and discounts are most prevalent. Restaurants are looking to recoup some lost traffic due to the pandemic. Many of these will require discounts in order to get them back into the doors.
According to Saleh, the return of promotional offers means that restaurants are becoming more competitive. However, chains now raise prices for value meals and promote items with lower inflation.
Saleh claimed that almost no one is using TV to market chicken wings.
Technomic Ignite data showed that in the period July to September 17% more restaurants were offering value menus than a year earlier.
Breakfast value meals increased 19.6% while snack value meals experienced a 11.5% increase in their price. The researcher reported that the average value meal price fell 1.3% over the previous year.
Technomic principal David Henkes said that the drop in value meal prices, as seen in data, may be due to restaurants shifting their attention towards limited-time deals with greater margins. According to Henkes, another factor could be that fast-food restaurants use cheaper ingredients or reduce portions in order make the meal seem more affordable even though it is a different value meal.
Domino’s, one of many fast food chains that is making adjustments to national promotions for this year, is Domino’s. Ritch Allison, CEO told investors at the virtual ICR Conference earlier in the monthThe decision to make this move was prompted by rising food basket prices.
Its $7.99 weekly carryout deal is the first to get a revamp. Digital customers will not be able to order chicken wings and boneless wings. Instead, they’ll only be available in eight pieces.
Allison stated that online presenting an offer has many benefits. One is more expensive, while two are cheaper to offer because there’s no need to answer phones. Third is the access to crucial data.
Due to customers’ familiarity with $7.99, the pizza chain decided not change its pricing.
Popeyes follows a similar approach. Its Big Box deal will only be $5 — its previous price — when customers order it for pickup through the fried chicken chain’s app or website. Customers will need to add $1 if they place an order at the restaurant, drive-thru line or both. You can find the full list here. Restaurant Brands InternationalCNBC reported that chain stated in a statement that this year’s promotion was designed to drive digital growth.
Not only are big chains changing their promotions, but so is everyone else. Leanna Olbinsky is the director of restaurant success at point-of sale company Table Needs. She said that independent restaurants are taking a different approach to value dining and emphasizing ingredients from their shelves and fridges.
She said, “For instance, if you make a popular bacon-based burger, we will now offer an appetizer as part of our happy hour deals, using all the ingredients that we have.”
However, certain restaurants chains plan to reduce their promotions. Darden Restaurants’On December’s earnings call, Rick Cardenas, the new CEO at Olive Garden stated that Olive Garden won’t be returning to its Never-Ending Pasta Bowl arrangement. El Pollo LocoLaurance Roberts, interim CEO and chief financial officer, stated in November that the chain will be focusing on cutting prices rather than increasing its price points. Also Carrols Restaurant GroupAt the virtual ICR Conference, the biggest U.S. Burger King franchisee stated that the lower prices will be maintained throughout the first quarter.