RICHMOND Va. As KFC heavily promotes its new Toasted Wrap, citing direct comparisons to competitor McDonald’s Snack Wrap, one securities analyst reported last week that while the snack may not be the desired “breakthrough” item for the fried-chicken chain, a resulting sales bump is likely.
Introduced in late February, KFC’s snack item consists of a deep-fried white-meat chicken strip, a three-cheese blend, lettuce and pepper-flavored mayonnaise wrapped in a flour tortilla and toasted. It’s priced at $1.29 in some markets. Offered as a combo meal with a soft drink and a side item, the meal is priced at about $3.29 in certain markets.
“We question the extent to which [KFC’s Toasted Wrap] may represent a breakthrough product for the brand in the way that the popular KFC Snackers and Famous Bowls have,” Jeff Omohundro at Wachovia Capital Markets LLC, based here, said in a report. “However, we note that KFC’s recent product innovations have been well-received by consumers, and given that the chicken wrap category has proven successful at McDonald’s, we think that some potential sales benefit from the new KFC Toasted Wrap is likely.”
KFC, a division of Louisville, Ky.-based Yum! Brands Inc., launched the product as other quick-service competitors also are attempting to build a between-meals snack daypart. McDonald’s has cited successful sales of its Snack Wrap, also a chicken and tortilla product, now sold in several varieties for an equivalent price to KFC’s version. As part of its marketing blitz, KFC said late last month that based on regional taste tests, consumers who eat chicken wraps at fast-food restaurants preferred the KFC Toasted Wrap to the McDonald’s Snack Wrap with ranch sauce. KCF parent Yum has said it expects its long-term domestic same-store sales to grow at a 2-percent to 3-percent rate. It posted flat domestic same-store sales in 2007.
Omohundro’s report also noted that Burger King plans to test a BK Chicken Wrap in select markets — with at least some restaurants located in Louisville, Ky.; Norfolk, Va.; and Syracuse, N.Y. — expecting to introduce the product this month. The offering features spicy chicken, lettuce, a three-cheese blend, and a Southwest sauce, wrapped in a flour tortilla. The offering will most likely be priced in the value-oriented $1 to $2 range, the report indicated.