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Better Burgers, Higher Prices

Filed under Pricing, Research

Source: NPD Group/CREST

When Jack in the Box launched its new All-American Jack Combo (shown) last week, it priced the burger/fries/drink meal at $4.99. That put it right of the top of the pricing “sweet spot” for quick-service burger chains. Jack in the Box had mined the lower edge of that pricing target in May with its $3.49 Value Deal meal.

According to data from The NPD Group/CREST presented by Wendy’s during its recent Investor Day event, about one-third of QSR-burger average-eater checks fall into the $3-to-$4.99 range, making it the largest single wedge of the pricing pie. But checks in the $5-to-$6.99 range are catching up, accounting for 28%, and more than one in six checks (17%) is more than $7. The value sector ($3 or less) accounts for slightly less than one in four checks.

That’s because the so-called “better burger” movement always has been a “pricier burger” trend at heart. And that’s not a bad thing for restaurant operators or burger lovers, because burgers have gotten better as well as more expensive as a result. That’s fair, eh?