Sonic plans to simplify its crowded food-and-drink lineup when it introduces new menu boards on May 26. But gaining breathing room comes at the cost of removing 18 slower-selling items. At the same time, however, the chain is adding new limited-time Loaded Burgers, drinks and a dessert.
KeyBanc Capital Markets’ restaurant analyst Brad Ludington reports from Oklahoma City-based Sonic’s annual Analyst Day meetings that the new menu boards allow core items—burgers, hot dogs and drinks—to be more prominent. Sonic’s current menu includes six burgers, six hot dogs, nine chicken items, five breakfast items, nine sides and two salads, plus kids items and wide variety of drinks.
Getting downplayed on new menu boards is the chain’s budget-price Everyday Value Menu, which is being restructured. Writes Ludington, “Besides the name change, the ‘Everyday Deals’ menu will add ‘laddered pricing’: instead of pricing all items at $1, some items will be priced at $1.50 and $2 to better transition customers from the Everyday Deals menu to premium items and combo meals.”
Sonic told analysts it implemented a 1% to 1.5% menu-price hike at company stores in April, according to Ludington, who says he “expects the system will take pricing along with the new menu rollout in May and June.”
Also in Sonic’s near-term plans, according to Ludington:
► The previously reported addition of Ring Leader (1,230 calories, with onion ring, bacon and grilled onions) and Blazin’ BBQ (1,120 calories, with jalapeño strips, bacon, pepper-Jack cheese and habanero sauce) builds to its Loaded Burger line begins this week with marketing expected to begin next week. TV advertising from new agency partner Goodby, Silverstein & Partners supports the burger addition.
► Diners now can double the Loaded Burger patty for a $1 upcharge, a cost-cutting shift since double patties were standard with last year’s initial Loaded Burgers.
► Ludington says he expects Sonic will consider testing a smaller Loaded Burger priced at $1.99. “We feel that a successful launch of a smaller burger at a $1.99 price point could prove longer term to be the right strategy to help drive traffic and check during off-peak afternoon and late night dayparts,” he writes.
► Sonic has proved adept not only at creating beverages but also at naming them. Ludington reports that summer plans include introduction of three new drinks: Dr. VanLimer, Pink Flamingo and Orange Cool Breeze. For dessert, a Double Stuff Oreo ice cream product will be added.