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Are Price Hikes Killing Lunch?

Are Price Hikes Killing Lunch?

Menu-price increases are eating restaurants’ lunch. Data from The NPD Group find that lunch, which accounts for 33% of foodservice traffic, has been losing customers for two quarters. The damage to the business is largely self-inflicted: NPD says consumers are being priced out of lunch, especially in fast-casual concepts. For the quarter ended in June, […]

Wendy’s Ponders ‘Appropriate’ Pricing

Wendy’s Ponders ‘Appropriate’ Pricing

Emil Brolick, who retired as Wendy’s CEO in May, used to give wonderful, thoughtful mini-lectures on industry issues occasionally during earnings calls. In February, I called his report a “QSR Tutorial.” I’m pleased that his successor, Todd A. Penegor, is maintaining that style. Wendy’s Q2 reported included weak same-store sales—0.4%–but some gains, including a boost […]

Cowen Sees ‘Arms Race to the Bottom’

Cowen Sees ‘Arms Race to the Bottom’

Quick-service restaurants’ continuing focus on aggressive discounting is an “unhealthy industry dynamic” that could bring future problems, according to a late-June report from financial-services firm Cowen and Company. Cowen analyzed Facebook posts from January 2015 through May 2016 for eight top QSRs: McDonald’s, Burger King, Wendy’s, Sonic, Jack in the Box, Subway, Taco Bell and […]

NPD: Discounting Not Increasing Visits

NPD: Discounting Not Increasing Visits

Consumer restaurant traffic was flat in Q1, but restaurant visits on deal were up twice that rate overall and up 3% for quick-service restaurants, according to The NPD Group. A significant driver in that “deal” traffic has been the discount competition among QSR burger chains, especially McDonald’s heavily marketed McPick 2 for $2 or $5, […]

Burger Deals Escalate; Is BK’s a Value?

Burger Deals Escalate; Is BK’s a Value?

Yesterday’s post spotlighted the accelerating discounting competition among burger chains. Burger King’s introduced a “2 for $10 Whopper Meal” deal and Sonic added a new $5 Boom Box meal bundle to compete with similar “value deals” from McDonald, Wendy’s, Carl’s Jr., Checkers and others. But yesterday had barely begun before several interesting reactions occurred. One […]

BK’s 2 for $10; The Counter’s New Menu

BK’s 2 for $10; The Counter’s New Menu

Burger King today responded to McDonald’s “McPick 2 for $5” with a new set of numbers to the burger-chain discount game. Its new “2 for $10 Whopper Meal” deal offers two quarter-pound Whopper burgers, two small fries and two small drinks for one bundled price. But will consumers see two three-item meals as better than […]

McD’s Operators Applaud Move to 2 for $5

McD’s Operators Applaud Move to 2 for $5

McDonald’s is doing well enough that Nomura analyst Mark Kalinowski increased to 4.6% from 3.8% his Q1 U.S. same-store sales forecast for the chain. First quarter results will be announced on Friday. While not quite as strong as the 5.7% comp-sales gain in 2015’s Q4, 4.6% would signal that McDonald’s recovery is continuing. But it’s […]

Jack, Taco Bell Turn Up Discount Heat

Jack, Taco Bell Turn Up Discount Heat

Jack in the Box is making good on its promise to be a more aggressive discounter. Merrill Lynch restaurant analyst David Silvati reports that the chain last week launched a $3.99 Jumbo Jack bundled meal with the burger, two tacos, fries and drink in 40% of its markets. In the other 60% it has bundled […]

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