The $1 Menu Battle Continues and Consumers Win!

Most recently, Burger King entered the $1 burger battle with news that it would roll out a $1 double cheeseburger to all U.S. locations on Oct. 19. A few days later, Jack in the Box unveiled its new Bonus Jack Combo Meal, which features a double-patty cheeseburger along with a small order of fries and a small drink for the suggested price of $3.99.

The new offerings will compete with McDonald’s Dollar Menu, which includes the McDouble sandwich, and Wendy’s 99-cent specials, including its Double Stack, as well as the proliferation of premium burgers, like the Big Carl at Carl’s Jr., muscling their way onto fast-food restaurant menus as operators work to enhance their value messages with both low-cost and more upscale items.

As consumers continue to battle against recessionary pressures, not the least of which is rising unemployment, deals are crucial to winning customer traffic—even as restaurants question whether pervasive discounting will affect perceptions of quality, or spoil consumers to the point where low prices or value-driven deals will be required for the long term.

“Bottom line is, you are going to see significant discounting continuing in the Quick Service Restaurant industry,” said Alan Vituli, chairman and chief executive at Carrols Restaurant Group Inc., the largest Burger King franchisee, during the company’s latest conference call in August. “We believe that Burger King’s strong value proposition coupled with a renewed focus on value advertising can and should resonate with consumers in the current economic climate.”

According to research from The NPD Group, when consumers who had cut back on restaurant visits were asked what would entice them to go to restaurants more often, they listed discounts, coupons for a free item, more dollar menu items, a choice of price offerings and other cost management options. The largest percentage of respondents, 31 percent, wanted price discounts on regular menu items, while 24 percent wanted coupons for free items and 23 percent wanted $1 or 99-cent offerings.

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