Fast Food Shines Its Light Again On Value Menus

Nevin Barich

Nevin Barich

LOS ANGELES , December 12, 2017 () – In the fast food industry, there’s one thing you can always count on to grab the spotlight: Value menus. Like the rising of the tides, sooner or later companies put value menus to the forefront to drum up customer traffic.

And it looks like the tide is rising again.

Last week, McDonald’s announced the latest variation of its dollar value menu, which includes menu items that are $2 and $3 each. Around the same time, Taco Bell announced that it would add 20 items to its $1 menu beginning next year.

While the U.S. economy is strong, "people are looking for value," said Brian Yarbrough, a consumer discretionary and consumer staples analyst at the brokerage firm Edward Jones.

And while customers are looking for that value, fast food chains are hoping that beefed-up value menus will cause those customers to buy multiple items, said R.J. Hottovy, a restaurant analyst at the investment research firm Morningstar.

"It could be a situation where someone goes in thinking about buying one thing and then gets thinking, 'This is pretty reasonable,' and going to add on a few things," Hottovy said.

But consumers need to be mindful with value menus, because it’s easy to fall victim to what I like to call the “Value Menu Bait and Switch.” That’s when fast food chains move current food items to their value menu but actually raise the price. McDonald’s is doing it right now with its Triple Cheeseburger. Priced at $2 when it first arrived on the everyday menu in 2014, the burger’s recent cost was $2.79 before being moved to the Golden Arches’ new value menu. Today’s cost of the Triple Cheeseburger: $3. Some value, right? Also, Del Taco‘s “Buck & Under Menu” may sound good, but many of the items on the menu were always under $1 and are actually more expensive than they used to be.

But that aside, value menus can offer customers good deals. And the spotlight is on them again.

The tide is rising.

Nevin Barich is the Food and Beverage Analyst for Industry Intelligence and is also Menuism’s fast food expert. Email him at Nevin.Barich@industryintel.com or follow him on Twitter.

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