Dive Brief:
- Taco Bell added another weapon to its arsenal of value offers this week, with its $7 Luxe Cravings Box, the company announced Thursday.
- The $7 deal consists of a “Chalupa Supreme, Beefy 5-Layer Burrito, Double Stacked Taco, chips and nacho cheese sauce, and a medium drink,” and runs for a limited, but unspecified, period of time.
- Taco Bell’s strategy this year has included a significant focus on value. The chain launched a 10-item Cravings value menu in January, in an early entry in the 2024 value wars.
Dive Insight:
The discount offered on the items, when ordered individually, begins at 55%, Taco Bell said. The discount rate varies by location, at one Connecticut Taco Bell, the items included in the deal cost $19.15 when ordered separately, making the Luxe Box a roughly 63% discount.
In Q1, Taco Bell's U.S. same-store sales grew by 2%. The Cravings menu helped drive the brand’s success, Yum Brands CEO David Gibbs said during an earnings call.
“Nearly one-third of transactions contain an item off the Cravings value menu, and when purchased, 80% have at least one other item added, translating to a nearly 10% check uplift compared to non-cravings value menu checks,” Gibbs.
Gibbs said that Taco Bell is not seeing the drop off in low-income consumers that other QSR brands are seeing this year, and that Taco Bell is well-positioned as a value leader. Taco Bell’s same-store sales growth was accelerating at the time of the earnings call in May, Gibbs said.
Other brands have leaned into value in recent months in an effort to recoup traffic. KFC, also a Yum brand, is serving a $4.99 meal deal through the end of the year, while McDonald’s recently launched a $5 meal deal, and Burger King is selling multiple value deals. The shift towards value meals follows a long period in which food away from home prices have outpaced overall inflation. According to the Bureau of Labor Statistics, restaurant prices have grown faster than inflation every month since September 2022.
