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Chains Seek New Ways to Promote “Value”

Filed under Advertising, Discount, Pricing

McDonald’s Corp. rebounded quickly from the black eye of October’s first drop in same-same sales in nine years. November comp sales rose 2.4% globally and 2.5% in the U.S., thanks, the company said, to “the ongoing popularity of McDonald’s breakfast along with balance across everyday value offerings, premium menu options including the limited-time Cheddar Bacon Onion sandwiches, and the beverage line-up.” So, everything.

But you can bet the U.S. rebound owes more to sales of $1.99 Daily Double burgers than to $4.39 Cheddar Bacon Onion burgers. The economy’s still squishy soft; consumers remain conservative spenders, at least on food away from home. And McDonald’s and others are looking at new ways to offer “value pricing” beyond naked discounting.

In Canada, McDonald’s has launched a “2 Can Dine for $9.98” campaign, despite its traditional disdain for “twofer” promotions. The TV pitch is that two Big Mac Extra Value Meals can be had for that special price through Dec. 23.

A further sign that McDonald’s is willing to deal to beef up sales in this economy comes in Chicago, where the McRib already is back on the menu. A special offer being advertised is a McRib for just $1 with the purchase of an Extra Value Meal. If this scores, the offer could be used more widely when McRib goes national next week.

Also looking at value-marketing tactics that promote spending is Red Robin Gourmet Burgers, which in October said it would be reevaluating every aspect of its brand, from its logo to its uniforms, service model and menu. In some markets it is testing new menus, with changes more in format than food. In North Carolina, the Red Robin test menu offers a variety of appetizers and portions priced at $2, $4, $6 and $8. That spans a spectrum from Yukon Chips & French Onion Dip and others at $2 to Saucy Pork Riblets and others at $8. As it was with the $2, $4, $6, $8 Value Menu introduced by Denny’s in 2010, Red Robin’s intent is that diners can more easily choose a right-price starter that fits their budget.

Appetizer sales declined during the depths of the recession and they have struggled to rebound. Red Robin’s test menu’s array of starters is larger (with more higher-price choices as well as more budget selections) than on the regular Red Robin menu, where a mix of appetizers are priced from $4.99 to $8.99.

New baguettes coming to McDonald’s in France

McDonald’s heightened awareness of the need for value pricing is a global marketing initiative. Its November comp sales increase in Europe was just 1.4%, signaling the need for increased value offers. In France, the chain is readying a new three-item line of baguette sandwiches that will be value priced (with a medium drink) at €4.50 (approximately US$5.80). The original McBaguette burger was introduced in the spring. A snack-size Petit McBaguette was added this fall. The new line coming to McDonald’s in January will include a burger baguette with Oriental flavorings, a pepper-spiced chicken baguette and a third with sliced ham and Emmental cheese. All three sandwiches will be topped with potato pancakes.

More burger news from France: The Quick chain has introduced Le Tony Burgers, named for French-born NBA star Tony Parker, who appears in TV spots. Topped with either raclette or blue cheese, Le Tony Burgers have double beef patties, lettuce and onion and are served on buckwheat-topped buns.