Fast-food chains face a tough challenge right now. Costs are up for pretty much everything -- food, packaging, labor, electricity, and anything else you can think of -- at a time when customers have become very value-conscious. Because whether the United States economy is actually in a recession or not, many people are worried that we are. Couple that with higher rents, price increases at the grocery store, and falling, but still high gas prices, and you can see why consumers have an eye on their wallets.
That's sort of a mixed blessing for value-based fast-food chains like Wendy's (WEN) and Restaurant Brands International's (QSR) Burger King. On one hand, value-conscious customers -- including some who may be trading down from more expensive options -- are more likely to try these chains. But, the converse side of that is that both chains' existing customer bases expect long-running value deals to stay on the menu.
Wendy's already made a major change in that area and Burger King has followed by doing something similar.
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Wendy's Had to (Mostly) Drop its Most Popular Offer
For years, Wendy's core value offer was its 4 for $4, a strong deal that gave customers a drink, a small fries, a four-piece order of chicken nuggets, and a choice of sandwich between a Jr. Bacon Cheeseburger, the Crispy Chicken sandwich, the Doublestack (which has is a Jr. Cheeseburger with two patties), or a Jr. Cheeseburger.
Basically, you could opt for a sandwich with two burger patties at no extra charge. As you might imagine, that was a very popular deal, but as costs rose, Wendy's reintroduced its $5 Biggie Bag and mostly phased out the 4 for $4.
The chain kept the 4 for $4 on the menu, but only offered it with a Jr. Cheeseburger. It then moved the choice of sandwiches into the $5 Biggie Bag offer. It wasn't a solution everyone loved, but it at least gave customers who wanted the lower price point a way to buy a meal for $4.
Burger King has made a similar price change, but its deal-seeking value-conscious customers may not be anywhere near as happy.
Burger King Makes a Pricey Menu Change
Burger King had been selling a $5 Your Way Meal since mid-April, likely as an answer to the Biggie Bag, It first appeared on menus in 2021, but was only offered for a few months before it went away.
Now, the chain has once again dropped the $5 price point, but it's not quite that simple. Burger King has added a $6 Your Way Meal, but it didn't simply raise the price, it is giving you more food for that extra dollar.
"The new $6 Your Way Deal includes your choice of a Rodeo Double Cheeseburger or Bacon Double Cheeseburger, plus a 9-piece Chicken Fries and Value Fries," Chew Boom reported. "By comparison, the $5 Your Way Value Meal included a Double Whopper Jr., 4-piece Nuggets, small French fries, and a small drink."
There's obviously some complicated profit margin math going on here. Burger King obviously makes more money selling customers the pricier, but bigger meal than it does selling the original, smaller $5 meal.
To further complicate matters, there are some Burger King locations selling the new $6 Your Way meal for $7.
The challenge for Burger King is getting customers to see the new offer as a better deal that's worth the cost. Unlike Wendy's the chain did not keep the old price point so if you want a combo meal that includes a sandwich, a chicken-based entree (nuggets for Wendy's, "fries" for Burger King), fries, and a drink, at The Home of the Whopper, you'll have to spend at least $6.
