Burger King is launching a $5 value meal promotion to boost sales amid rising fast-food prices. This move follows a similar announcement from McDonald’s set to launch its own $5 meal on June 25.
Also Read: Red Lobster Files for Chapter 11 Bankruptcy
Burger King’s $5 Meal Includes:
- Choice of one of three sandwiches: Whopper Jr., Chicken Jr., or Bacon Cheeseburger.
- Chicken nuggets.
- Fries.
- Drink.
Exact launch date date is not specified but will begin ahead of McDonald’s June 25 launch. The promotion will run for several months.
Fast-food prices have surged driving away budget-conscious customers. Labor and food costs have risen with 22 states raising minimum wages in January 2024. The U.S. Department of Labor reports a 33% increase in fast-food prices since 2019.
Revenue Management Solutions found that about 25% of people earning under $50,000 have cut back on fast food due to cost concerns.
Both Burger King and McDonald’s CEOs acknowledged the need to keep prices affordable to maintain customer loyalty.
Wendy’s New Breakfast Combo:
- Potatoes plus an egg sandwich for $3.
- $5 Biggie Bag: Choice of three sandwiches, nuggets, fries, and a drink. 2 for $3 Breakfast Biggie Bundles. Limited promotions like a one-cent Jr. Bacon Cheeseburger for National Hamburger Day from May 28 to June 2.
Burger King claims to have led the industry in value traffic for three quarters. The $5 Your Way Meal was agreed upon with franchisees back in April. Additional value platforms are being considered for the second half of the year.
Economic pressures are pushing consumers to opt for more home-cooked meals. Foot traffic at fast-food and casual dining locations has decreased or slowed in growth.
Restaurant Brands International, Burger King’s parent company has seen increased demand and outperformed Wall Street projections.
McDonald’s missed earnings targets for the first time in two years attributing the miss to cautious consumer spending.
22 states raised their minimum wages in January 2024. Federal baseline pay remains at $7.25 an hour.
Labor advocates argue that rising employee wages are not the main driver of higher fast-food costs. The Roosevelt Institute’s March analysis of California fast-food restaurants indicated record profit margins for the industry.
Also Read: Plant-Based Diets Reduce Cancer and Heart Disease Risks, 20 Years Study Finds
Fast-food chains are offering various promotions to attract customers. Wendy’s, McDonald’s, and Burger King are all engaging in aggressive pricing strategies. Promotions include discounted meals, free items, and limited-time offers.
There is a growing cost difference between dining out and buying groceries. Experts highlight that 70% of the cost of dining out goes to overhead and labor with only 30% spent on food.
The decision to reintroduce the $5 “Your Way Meal” was approved by Burger King’s franchisees in early April.
The chain is moving quickly to implement the promotion planning to get ahead of McDonald’s similar initiative.
The memo from Burger King’s US and Canada president, Tom Curtis, addresses the company’s determination to launch the meal deal maintain it for a longer period compared to McDonald’s short-term offering.
Fast food prices have remained high since the pandemic driven by increased food and labor costs. As a result many consumers have become more selective with their spending.
A survey by financial firm LendingTree revealed that 78% of Americans now view fast food as a luxury due to rising prices.
Also Read: Indian Spice Makers MDH and Everest Under Global Scrutiny
Wendy’s announced a $3 breakfast meal deal including a breakfast sandwich and seasoned potatoes. Chili’s introduced a burger combo starting at $10.99, which is comparable to the price of a Big Mac meal at McDonald’s in some urban areas.
McDonald’s has also been working on a $5 meal deal, set to launch on June 25. This promotion will run for about four weeks.
The McDonald’s meal deal aims to provide approximately $18 worth of food based on current prices in urban areas.
There has been some criticism on social media regarding the perceived “skimpy” nature of the deal and its limited duration.
The fast-food industry is facing pressure to attract budget-conscious consumers. Inflation has led to higher prices across the board and many customers are opting to dine at home or choose fast-casual options like Chipotle.
Burger King’s strategy to launch and sustain the $5 meal deal for several months is a direct response to these market conditions.
The company hopes to capitalize on the demand for affordable meals and enhance its value proposition. Burger King’s parent company, Restaurant Brands International has seen a revival in demand with recent quarterly results surpassing Wall Street expectations.
Besides the $5 “Your Way Meal,” the chain is testing two other value platforms which could be introduced in the second half of the year.
Burger King continues to promote its Melts, a lineup of spicy products, and its iconic Whopper, catering to a range of customer preferences.
An independent group of McDonald’s franchisees highlighted the thin margins associated with value meals and the challenges by labor and operational costs.
McDonald’s reported that franchisees achieved some of the highest cash flow figures in the company’s history in 2023.
Also Read: A 30 Year Study Reveals Ultra-Processed Foods Linked to Early Death
