U.S. fast-food chains dish out pricier menus
Squeezed by higher food costs, America's fast-food chains are shifting their focus to the higher-end of the menu.
Instead of prominently featuring the $5 and under value meals: sandwich, fries and drink, that became an industry standard in recent years, chains like McDonald's are upscaling their combo items and upscaling the price.
The world's largest fast-food chain is now aggressively promoting its $10 chicken McNugget "BTS Meal", named for the popular South Korean boy band that endorses it...
and scaling back its "$1 $2 $3 Dollar" menu to just 8 items instead of 12.
And Mickey D's is not alone.
Data show fast-food chains launched fewer new combination meals over the last 18 months, according to Datassential, a Chicago research firm that counts the deals that U.S. national restaurant chains promote on their websites and social media.
And when there are new deals, the price tags are higher.
That's something avid fast-food eater Randy Slaughter of Tucson, Arizona has noticed. He uses apps on his mobile phone to help him pick where to eat based on which of his favorite spots still have the best value meals.
"I will look elsewhere if, for example, when they're taking it away, someone else adds it (a value option). You know, I'll kind of pivot for a little while."
It's not just higher food costs that's driving fast-food chains to offer higher-priced combo meals. Demand soared throughout the health crisis with few alternative eating options out there.
And not only that - the current popularity of chicken sandwiches - means fast-food chains don't have to discount as much.
Wendy's, which popularized its 99-cent Biggie menu in 1989, is now seeing success with a new $7 Spicy Pretzel Bacon Pub – a fried chicken filet on a pretzel bun topped with pickles, fried onions, bacon, two kinds of sauce and muenster cheese.
And it's not just chicken.
Demand is also so strong for pizza, that Dominos said it has suspended a half-price pizza promotion for online orders.
But some industry watchers worry higher prices could alienate a key portion of fast-food's customer base: hourly workers and other lower-income customers who have grown accustomed to getting a quick meal for just a few dollars.
Don't worry, says BTIG analyst Peter Saleh.
"Once things are more normal, I think you'll see value come back onto-- onto the menu. That may not be until, you now, December or January."
But not all of the deals are gone...there are just fewer of them.
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