USA – Wendy’s is the latest fast food chain to offer a value meal for low-income customers, the US$3 breakfast combo meal is part of the company’s strategy for improving sales as customers cut back on fast food amid high prices. 

The value meal includes a choice of an egg, bacon, and cheese muffin or an egg, sausage, and cheese muffin plus a small portion of seasoned potatoes. 

Wendy’s announced the value meal barely two weeks after McDonald’s announced the launch of a similar value meal option retailing at US$5 as it also tries to increase sales volume.  

The value meals are part of the fast food chains’ responses to customers pulling back on spending following an increase in fast food prices. 

Many fast-food restaurants have recorded poor to mixed performance as inflation ravages spending habits.  

Although fast food prices have risen sharply in the past two years, fast food companies only recently started feeling the effects of inflation on their performance.  

KFC and Starbucks are some fast food chains that have declined in same-store sales in Q1 2024. KFC’s same-store sales declined 2%, while KFC’s same-store sales declined 7% within the reported quarter. 

Although McDonald’s same-store sales increased by 1.9% in the reported quarter, this fell short of earning expectations.  

Wendy’s revenues grew by 1.1% in the reported quarter, while same-store sales grew by only 0.9%. 

Fast food chains have also acknowledged competition for the dwindling fast food market. 

McDonald’s CFO Ian Borden said, “Clearly everybody’s fighting for fewer consumers or consumers that are visiting less frequently, and we’ve got to make sure we’ve got that street-fighting mentality to win, regardless of the context around us.” 

This competition has inspired fast-food restaurants to adopt different techniques for attracting and retaining customers, especially low-income customers.  

Wendy’s and McDonald’s value meal offerings are strategic responses to appeal to this market segment. 

However, inflation is predicted to slow down in the near future, which should create some form of price stabilization. 

It is still unclear when this predicted price stabilization will be reflected in the fast food sector’s performance. 

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