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The Street
The Street
Danni Button

Taco Bell Follows Wendy's, Burger King in Bringing Back Key Value Deal

This year, the fast food wars may be fought on the field of the value meal. Every fast-food giant seems to be shuffling up value menu deals, with each company trying to balance the needs of the price-conscious consumer and a rising price in ingredients. Sometimes that means raising prices on certain menu items, but it also means wooing the customer who prioritizes savings. It's a delicate balance.

When it comes to value deals, most analysts agree that $5 is the magic number. It's the line between what customers typically see as a regularly-priced item and a deal. Subway has the $5 foot-long, Wendy's (WEN) brought back the $5 Biggie Bag last year, and Restaurant Brands International (QSR) favorite Burger King is the home of the $5 Your Way Deal. Even McDonald's (MCD), which is famous for its super-cheap dollar menu, has a 2 for $5 Mix & Match Deal.

Never a company to be left behind, Yum Brands (YUM) popular Mexican food chain Taco Bell has been testing a delicious new deal -- and it's rumored to arrive at your nearest location very soon. 

Taco Bell

Taco Bell's Cravings Trio Is Coming

Last December, Taco Bell was spotted testing a new promotion called the "Cravings Trio" at some Ohio and Nebraska locations. Customers could choose three main menu items including the Mexican Pizza, Crunchwrap Supreme, or Cheesy Gordita Crunch for what was then reported as $6. The deal came with a Doritos Locos Tacos and a medium-sized fountain drink.

Taco Bell announced last week that the deal was a success and would be launching nationwide -- now ringing in at the magical $5 price point. There's been no official word yet on when fans of Taco Bell's crunchiest, cheesiest goodies can expect the deal to appear on menus. Now, a source for Chew Boom says that the $5 Cravings Duo is set to make its debut on Thursday, February 9. 

Yum Brands Exceeds Expectations in Q4

Yum Brands has really seen success with its value menu in the last quarter as Taco Bell showed strong sales growth, especially in its international division.

"At Taco Bell International, Q4 system sales grew 23%, driven by 29% unit growth and 4% same-store sales growth," chief executive officer David Gibbs said during the company’s fourth quarter 2022 conference call. 

"Q4 closed a truly breakthrough year for our international business, which has now crossed the 1,000 unit mark. To put this speed into some historical context, Taco Bell International has built 40% of its current estate within the last two years."

Two of Yum Brands' other holdings, Pizza Hut and KFC, both took some bruising to revenue due to weak sales in China. Neither of the two companies was able to pull off Taco Bell's impressive rise in revenue. It's not uncommon, as Taco Bell is typically the largest earner in Yum Brands' portfolio. But last year that revenue was likely helped by the sales of "around 45 million Mexican Pizzas" sold during a limited four-month run. 

“We’re connecting and we’re winning because of value,” Gibbs said in what could be the fast food mantra of the season -- 2023 very well could be the year of the value meal.

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