Quick-service restaurants went all-in on discounts and value meals this summer, as consumer wariness of rising fast food prices pressured sales. While many of the offerings were available for a limited time, some, like McDonald’s $5 Meal Deal, were extended into the fall in response to traffic bumps.
“In July, the full effect of the discounted meals and heavy advertising support took effect, but did not move the needle on the pricing gap vs. food at home,” BTIG analyst Peter Saleh wrote in a report on second-quarter earnings. During Q2, grocers secured a 320-basis-point advantage over restaurants, making it difficult for restaurants to keep attracting guests. In July, food-away-from-home inflation rose 4.1% compared to a 1.1% uptick in grocery.
“We expect intense discounting to continue as McDonald's formulates its new value menu and strategy this fall,” Saleh said. “We believe the rest of the industry will follow its lead, and expect sales to remain pressured for the foreseeable future until this pricing gap narrows back to historical norms.”
This means value offerings could result in dips in profitability, especially for franchisees who sometimes have to take a financial hit to try and improve traffic. The fact that McDonald’s franchisees want to continue the brand’s current value offering while McDonald’s develops a more permanent value menu suggests the strategy is yielding positive results. Still, the true impact of value offerings won’t likely be seen for months yet.
Check out the biggest meal deals chains introduced during the summer.
Burger King
Starting price: $5
Launch date: June 10
Burger King’s $5 Your Way Meal offers a choice of Whopper Jr., Chicken Jr. or Bacon Cheeseburger along with four-piece Chicken Nuggets, french fries and a soft drink. The deal has been so profitable that the chain extended the offer through Oct. 7.
McDonald’s
Starting price: $5
Launch date: June 25
McDonald’s $5 Meal Deal offers a choice of a McDouble or McChicken sandwich, small fries, four-piece Chicken McNuggets and small drink. The promotion was initially expected to last about five weeks, but franchisees indicated they would run it into September.
Taco Bell
Starting price: $7
Launch date: June 27
Taco Bell’s $7 Luxe Cravings Box added to the chain’s current value offerings, which also include its 10-item Cravings value menu that debuted in January. The Luxe Cravings Box offers a Chalupa Supreme, Beefy 5-Layer Burrito, Double Stacked Taco, chips and nacho cheese sauce and a medium drink.
Sonic
Starting price: $1.99
Launch date: July 1
Sonic’s $1.99 value menu includes the Bacon Ranch Queso Wrap and Southwest Crunch Wrap as well as a Quarter Pound Double Cheeseburger, Chili Cheese Coney, small tots and a 16-ounce shake. The value menu is permanent.
Del Taco
Starting price: $2 and under
Launch date: July 11
Del’s Real Deal$ value menu offers 15 items priced at $2 or less. This menu includes existing items like tacos, burritos, nachos and snacks and debuted snack-sized chips with housemade guacamole.
Taco John’s
Starting price point: $7
Launch date: Aug. 1 for a limited time
Taco John’s $7 Meal Steal in-app deal is a follow up of a recent $5 Meal Steal in-app offer that was extended through the summer. The $7 mobile ordering offer includes two crispy tacos, Nacho Crunch Beef Burrito, small Potato Olés and a small beverage.
On Aug. 19, the chain also added a buy-one-get-one for $1 promotion for a limited time. Guests can choose from items like the Meat and Potato Burrito, Super Burrito, Taco Bravo and a Churro and get another item on that menu for $1.
Hardee’s
Starting price point: $5.99
Launch date: Aug. 1
The Hardee’s Original Bag offers customers two full-size entrees — Hardee’s Original Hot Ham & Cheese, Double Cheeseburger or Hand Breaded Chicken Tender Wraps — alongside a small fry and drink. Customers can also upgrade to a medium or large size for an additional cost. Some markets have also been offering Hardee’s Chili Dog and a Regular Roast Beef Sandwich as options for the Original Bag.
While this is a summer promotion, it has the potential to continue in some franchise markets, a company spokesperson said.
Jimmy John’s
Starting price point: $10
Launch date: Aug. 5 for a limited time
Jimmy John’s $10 Total Package includes an eight-inch original sandwich of the guest’s choice, a bag of kettle chips, choice of dessert and a regular-size fountain drink.
Carl’s Jr.
Starting price: $4
Launch date: Aug. 14
Carl’s Jr. introduced its “More Bang, Less Buck” value meal with 10 items under $4 each. The new items are a Cali Jr., Jalapeno Jr., Bacon Cheese Jr. and Guac Jr. The menu also includes a Spicy Chicken Sandwich, six-piece Chicken Stars, small drink, small fries, chocolate chip cookie and chocolate cake. The menu was initially available at 500 restaurants, representing most of its units, but will be added to more restaurants in the fall.
Earlier in the summer, the chain offered a 2 for $6 meal promotion that expired Aug. 13. That deal offered a mix-and-match deal with a choice of French Toast Dips, small Hash Rounds, Spicy Chicken Sandwich, six-piece Chicken Stars, small fries, small cheeseburger or Spicy Lil’ Cheeseburger.
Checkers & Rally’s
Starting price point: $5
Launch date: Aug. 23 through Sept. 11
The 5 for $5 meal deal offers a choice between the Cheese Double and Spicy Chicken Sandwich and includes an eight-count Chicken Bites, small order of Famous Seasoned Fries, a 16-ounce soft drink and an apple pie.
Earlier in the summer, the chain also rolled out various low-priced items available through Sept. 15, including a Fry-Seasoned Chicken Tender Wrap and Bacon Ranch Cheeseburger, both starting at $1.99. It also began offering an online-only Chicken Bites Family Meal starting at $12.99.
Subway
Starting price: $6.99
Launch date: Aug. 26 through Sept. 8
For online orders, customers can use promo code 699FL to receive a discount on any footlong sub on the menu. The discount is available both on the Subway app or Subway.com.
