A popular burger chain is entering the fast-food affordability arena with a combo meal for less than $8.
Wendy’s announced Monday it launched the Dave’s Single combo meal - a quarter-pound burger on a potato bun, small fries and small drink for $7.99. The meal enters a heated battle to win over consumers who want value from their fast-food purchases as Americans continue to face price hikes on everyday goods.
“Fans don't have to choose between quality and value at Wendy's,” the company said.
Wendy’s said the meal is a limited-time offer and did not say when the promotion would end.
The new menu item comes as the company looks for ways to improve the value it offers its customers.
CEO Bob Wright said in a recent earnings call that the Wendy’s needs to boost its menu’s bang-for-the-buck and customer traffic.
“Today, we are not performing at our potential,” said Wright, who took over the CEO role in May from interim CEO Ken Cook. “Traffic is down, our value proposition has slipped, and franchisee economics are under pressure.”
This summer, Burger King passed Wendy’s as the second-largest U.S. burger chain by sales after Wendy’s held that position for six consecutive years, CNBC reported in August. The chain’s U.S. sales have dropped year on year for six straight quarters.
In the wider fast-food industry, there are concerns about the economy.
Consumers are spending around the same amount on fast food this year that they did three years ago, an August report from the Center for Economic and Policy Research found. That has led other chains to look at offering value meals. Competitor McDonald’s offers three meals from $5 to $7, depending on the store location, that include a sandwich, chicken nuggets, fries and a drink. Burger King recently rolled out a limited-time $7 meal - customers can pick three items from a group of six sandwiches, fries and drinks.
“[Spending is] still virtually the same as it was three years ago,” the report said. “That doesn’t make it look like the non-rich are feeling very good about their finances.”
That trend may not end anytime soon, CEO Chris Kempczinski said in a recent interview with CNBC’s Squawk on the Street segment.
“We’re not expecting that the industry all of a sudden is going to go to having robust traffic growth - we think that’s going to be largely flat,” he said. “We do think inflation is going to be with us for ... many more years at an elevated level.”
As Wendy’s tries to find its footing in this environment, it received some good news Monday via a survey of more than 11,000 Burger King and Wendy’s customers by polling firm YouGov. Customers believe that Wendy’s makes a better impression, provides slightly more value and considerably more quality than Burger King.
