On the Margin

My tour of the quick-service value meals

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This post is part of the On the Margin blog.

In October, The Wendy’s Company introduced a 4-for-$4 meal with a Jr. Bacon Cheeseburger, fries, four chicken nuggets and a drink for $4. In the weeks since, three of its biggest competitors, McDonald’s Corp., Burger King and Hardee’s/Carl’s, jumped into the fray with their own discounting strategies.

So your intrepid, restaurant finance reporter went out and visited each of them and tried their respective deals. My goal? Well, to be honest, I didn’t really have one, other than to see which deal I thought was best for the consumer, or best for the company.

I had a couple of rules, because even people like me who poorly construct scientific research must start out with rules. First: I’m not going to review the food. I’m not a foodie. Or even much of a food expert.

Second: I would only buy the base deal. No add-ons. This was a pretty weak rule, to be honest, because most of the time I would not need anything else.

McDonald’s. This was my first stop, because naturally McDonald’s was closest. It was also the cheapest, at $2, and so I could use the money I didn’t spend on a Powerball ticket for lunch.

The Golden Arches offers the most unique of the deals, giving consumers the ability to choose two from a selection of four items for $2. The choice element of the McPick 2-for-$2 menu is the thing the chain really hopes takes off, and I did like being able to choose my meal.

I chose the McChicken over the McDouble, because a recent Twitter discussion gave me a hankering for a chicken sandwich, and the mozzarella sticks instead of fries, because I’d heard a lot about them. I paid $2.14, my service was fast and accurate, and then I went and found myself something to drink because I was thirsty.

Hardee’s. I went to Hardee’s because I live in Minnesota and Carl’s Jr., the chain’s fraternal twin, is too far a drive.

Hardee’s is offering a $4 Real Deal, with a double cheeseburger, spicy chicken sandwich, fries and a drink for $4.

I could not find any marketing materials at the restaurant, and unsure whether this location was participating in the deal I asked at the counter. They had it, and I sat down, where my food was brought to me piled neatly into a basket.

The guess here is that franchisees won’t like this deal. Of all the meals being offered, this is the one that made me fullest. Both sandwiches, while not huge, were substantial. The fries were plentiful, and I wasn’t thirsty in the end. But as the money guy I kept wondering how the franchisee made any profit off the deal — any similar meal construction would have cost $6 at least.

Burger King. While the Miami-based chain was the third of four entrants into the burger wars, its 5-for-$4 deal — Bacon Cheeseburger, chicken nuggets, fries, a drink and a chocolate chip cookie for $4 — sort of kicked the wars into high gear. It was a typically aggressive move for Burger King.

Five items aren’t necessarily more than four, and the cookie seems like something of a throw-in to the deal to make it look bigger. The entrée in the deal, the Bacon Cheeseburger, was clearly constructed for this deal and was the smallest of the sandwiches any chain is offering. So while it offered more options, it provided less substance than the Hardee’s offering.

But that also makes it more appeasing to the chain’s operators, who say they can make a small profit while hopefully generating traffic.

Wendy’s. I’ll admit that when I went into Wendy’s and ordered the 4-for-$4 deal, I couldn’t help thinking that it’d be great to replace the nuggets with a Frosty. I’ll take a Frosty over just about anything. I’d be really happy with four Frosties for $4.

Like the other deals, the meal size was satisfactory, however, and by all accounts it’s generating traffic for the Dublin, Ohio-based burger chain. Indeed, the best indication that Wendy’s deal was a success was that so many of its competitors were rushing to match it.

The ultimate question for all of these chains is whether the deals are good enough to get customers to come in more often so they take business from other food purveyors and not just from one another. All of the meals seem to offer a good value, and all have their respective strengths. But only the McDonald’s deal was markedly different.

How long such deals continue remains to be seen. Wendy’s has extended its offer, Burger King and Hardee’s just got started, and McDonald’s is non-committal past February. Whether the latest battle in the Burger Wars goes past winter might ultimately depend on the results of such deals, and whether franchisees can profit off of them.

Contact Jonathan Maze at jonathan.maze@penton.com
Follow him on Twitter: @jonathanmaze

Discuss this Blog Entry 1

on Jan 28, 2016

" . . . any similar meal construction would have cost $6 at least." Pure poetry!

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Jonathan Maze follows the money

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Jonathan Maze

Jonathan Maze covers finance for Nations Restaurant News, as well as restaurant chains based in the Midwest. Jonathan came to NRN in 2014 after seven years covering restaurants for Franchise Times...
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