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Burger Chains Keeping Prices in Check

Filed under Burger, Pricing, Trends

Burger King may have raised some eyebrows with the steep $5.99 price for the Bacon King burger it introduced yesterday. Is this a sign of escalating burger prices?

Actually, it really isn’t. Although $5.99 is a premium price, it’s not Burger King’s highest. The record was last year’s A.1. Hearty Mozzarella Cheeseburger which went off at a suggested price of $6.49.

Two things should be noted about the 2016 crop of burgers from the five largest burger chains. The first is that fewer burgers major burgers have been introduced this year so far. I count just 18, although the chart below includes three McDonald’s burgers that are either in test or just sold regionally. That compares with 23 burger from the Big 5 in 2015. Chicken and breakfast have been this year’s focus for many chains.

burgerking-bacon-king-facebookThe second takeaway is that this year’s burgers average $4.79 in price, still below that $5 ceiling that has been the theoretical limit for some time. Wendy’s Baconator is this year’s only $6+ burger (although some of the Carl’s Jr./Hardee’s burgers can top $6 if ordered as third-pound Thickburgers). Last year, nine burgers were introduced at prices between $5 and $6 and the average for all new burgers was $5.22. So far this year there have been only six burgers in the $5-$6 price niche.

If it’s true that QSR burger chains are holding down prices, they’re being smart. The NPD Group last month released data showing a decline in lunch traffic, especially at fast-casual concepts (where lunch is down 9% vs. a yea ago), due in part to consumer push-back on rising prices.

Here are major burger introductions this year (click on the chart to see a larger, more legible version):

new-qsr-burger-prices-revised