Jack, Taco Bell Turn Up Discount Heat

From burgerbusiness.com by admin
Jack, Taco Bell Turn Up Discount Heat

Jack in the Box is making good on its promise to be a more aggressive discounter. Merrill Lynch restaurant analyst David Silvati reports that the chain last week launched a $3.99 Jumbo Jack bundled meal with the burger, two tacos, fries and drink in 40% of its markets. In the other 60% it has bundled its new Double Jack burger, fries and drink for $4.99.

In the chain’s Feb. 17 earnings call for its Q1 ended Jan. 16, 2016, Jack in the Box CEO Len Comma told analysts “heightened competitive discounting in the latter part of the quarter hurt our results. Jack’s company same-store sales rose just 0.5% in large part because of a 2.9% decline in customer traffic.Taco Bell - $1 Morning Value Menu - New Offerings (menu board)

“You can expect us to adjust the balance of value and quality-related messages in the future as we respond to the competitive environment,” Comma said last month. “We will get significantly more aggressive on the discounting side to be competitive.”

Jack in the Box isn’t alone in seeking ways to selectively drop prices or accentuate “value” offerings to counter what was a very difficult Q4 for many chains. Jack in the Box, which admitted that it was hurt by McDonald’s All Day Breakfast program, also has revived its deal on breakfast croissants, increasing the price by 50¢ from last year’s deal to a “Two for $4” offer.

The big discount news today was Taco Bell’s unveiling of a $1 Morning Value Menu, a collections of each priced at $1.

That menu includes three new breakfast items: the Mini Skillet Bowl (a breakfast bowl filled with seasoned breakfast potatoes, scrambled eggs, cheese and pico de gallo); Breakfast Soft Taco (a flour tortilla with scrambled eggs and choice of bacon or sausage, with Cheddar cheese); and the Sausage Flatbread Quesadilla (a grilled flatbread filled with a three-cheese blend, sausage, and scrambled eggs.

Among other items on the $1 Morning Value Meal are a Grilled Breakfast Burrito (bacon, sausage or potato with scrambled eggs), Cinnabon Delights two-pack, hash brown patty and small Mountain Dew Kickstart Orange Citrus (because it’s not breakfast without a soft drink apparently). To Taco Bell this a 10-item menu but it is counting the bacon and two Breakfast Taco and three Grilled Breakfast Burrito varieties separately. So, really, six items in a total of 10 configurations, if you’re keeping score at home.

Obviously, Taco Bell is looking to capitalize on McDonald’s move away from its Dollar Menu & More and its discarding of the McPick 2 for $2 in favor of the current McPick 2 for $5, a price point where Burger King has settled as well.

Speaking of dollar menus, on Feb. 15, 2016, the Krystal mini-burger chain announced a Happy Hour price promotion between 2 p.m. and 5 p.m. daily. Deals included 59¢ Krystal burger, a 79¢ Krystal with Cheese, and a 99¢ loaded Krystal with Cheese and Bacon. For one day, on March 16, Krystal makes its Happy Hour an all-day event, after which it returns to its three-hour slot.

One-day discount promotions such as Krystal’s are an idea Sonic Drive-In has refined. Yesterday, for example, it did a one-day discount on Jr. Deluxe Cheeseburgers to just 89¢.

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