The fast-food value wars are heating up as more leading chains join the fray and others extend their price cuts.
From deals to innovative use of apps and subscriptions, fast-food giants are pulling out all the stops. McDonald’s has extended its $5 Meal Deal through the end of the year, and Burger King extended its $5 Your Way Meal for several weeks into the fall. Carl’s Jr. and White Castle dove into the fray in August with ongoing price cuts. And Sonic Drive-In’s FUN.99 menu and Jack in the Box’s $4 Munchies meals are permanent price changes.
The price cuts appear to be drawing more customers, lifting fast food traffic by a modest 2–5% above year-earlier levels since the value wars began, according to Placer.ai.
The marketing wars may yield other lasting changes. Fast-food chains are using apps in innovative ways. Taco Bell recently introduced a “name your price tool” within its mobile app, asking customers to set a spending limit and offering them various menu combinations within that range. Chosen items can be pinned and remixed with other options to generate the budget order of the customer’s choice. Nearly half (46%) of 2,000 adults surveyed by Lending Tree said using apps entices them to visit fast-food restaurants more often.
Fast-food chains are also testing subscription plans that have been so successful in other industries. Taco Bell turned heads in 2022 by offering loyalty members who buy a $10-a-month subscription access to a special section in their app, enabling them to order a free taco or nacho fries every day. In a test run, the chain said the offering yielded a 20% increase in rewards memberships. Subway also has made subscriptions available intermittently, offering a 50% discount to loyalty members who purchase a $15-a-month subscription.
The industry faces fundamental problems, however. Nearly 80% of consumers have come to view fast food as a luxury, and two-thirds of them are cutting back, the Lending Tree survey shows.
For franchisees, making value pricing work on an ongoing basis is a challenge. According to research at Georgia State University, the best strategy is to bundle popular menu items with low-cost offerings, such as sodas, and to train employees to upsell customers on desserts or other higher-margin items.
