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Burgers at quick service become less popular as price climbs

Consumers dissatisfied with price of burger combo meals and lack of choice, NPD survey finds

The burger is America’s most-ordered menu item, but, in recent years, hamburgers, particularly served at quick-service restaurants, have fallen a few notches on consumers’ must-order list.

According to recent research from The NPD Group, quick-service traffic at lunch — the segment’s bread-and-butter — continues to steadily decline, and servings of burgers are down.

“The menu item ordered most should be ordered most at a burger restaurant,” NPD analyst Bonnie Riggs said. “There’s really no good deal, no value that consumers feel is a good value. [Burger restaurants] are just taking so much price people aren’t ordering burgers anymore.”

In recent years, quick-service burgers have stayed much the same, while their price has steadily increased, NPD found.

The pricing sweet spot for a quick-service burger at lunch is between $3 and $5, according to NPD research. That’s the price at which consumers say they are most satisfied with the affordability to eat at particular restaurant, eat there often and feel it's a good value. In the year ended December 2016, 68 percent of consumers who visited a burger restaurant paid between $5 and $10 or more for an order at lunch.

“Fast food is supposed to be convenient and relatively inexpensive,” Riggs said. “But it’s not that inexpensive anymore.”

Offering a burger as part of a combo meal hasn’t hit consumers’ sweet spot either, NPD found. The average selling price of a burger combo meal at a quick-service restaurant notably increased across the country in 2016. Some of the steepest increases were in Dallas, where the average price for a burger combo meal increased to $6.74 in December 2016, up from $5.26 in January 2016. In New Orleans, the average price of a burger combo increased to $7.37 in December 2016, up from $6.21 in January 2016.

“Consumers can just not afford to do that on a regular basis,” Riggs said.

A recent NPD satisfaction study revealed that consumers were not only dissatisfied with the price of burger combo meals, but also with the lack of choice. 

Where price and value meet

While many quick-service burger restaurants are struggling to serve their signature menu item at a price that satisfies consumers, others have found a way to hit a sweet spot. Executives from Wendy’s and Checkers and Rally’s share how they have been delivering burgers and burger combos at a price and value — and with some choices — that are resonating with consumers.

Wendy's has a 4 for $4 combo meal deal including a Jr. Bacon Cheeseburger, chicken nuggets, fries and a drink.

Wendy’s gives customers value with options  

In response to customer wishes for $4 lunch items, in October 2015, Wendy’s introduced a 4 for $4 combo meal deal, including a Jr. Bacon Cheeseburger, chicken nuggets, fries and a drink.

“At Wendy’s, everything we do starts with quality. That’s what sets us apart and makes our value offers so compelling,” said Kurt Kane, chief concept and marketing officer at Wendy’s. “The 4 for $4 deal is just one way we provide great value.”

Kane said the 4 for $4 deal continues to be successful because Wendy’s has switched it up, giving customers choices. For example, the Crispy Chicken BLT, Swiss Jr. Bacon Cheeseburger and the Double Stack Cheeseburger have all been options in the meal deal. To keep 4 for $4 interesting, Kane said Wendy’s plans to continue to rotate in “new great-tasting, quality products.”

“Based on the strength of our brand’s performance, we know consumers are going to be very excited about what’s ahead,” Kane said.

Checkers and Rally’s evolve offerings  

Last July, Checkers and Rally’s, which have approximately 840 units combined, launched a 4 for $3 combo featuring a choice of a three sandwiches (one of which is a burger with cheese), small fry, small drink and apple pie.

“Consumers were really missing the ability to create a meal from the $3 menu,” said Lauren Axe, director of brand marketing for Checkers and Rally’s. “We’re able to provide a full meal at that price point, but still with choice, which is immensely important.”

To keep the combo meal fresh, both brands recently added a fourth option, a Bacon Cheddar Crisp Burger, for a limited time.

Because its customers define value differently, Checkers and Rally’s is also offering specialty burgers priced at $1.99 for a limited time, such as the Buttersteak Burger, the Philly Cheesesteak Burger and the Peppercorn Steak Burger, as well as premium limited-time offers, such as the Steakzilla, made with two beef patties, shaved Philly steak, crispy onions and Swiss cheese, topped with a creamy peppercorn-seasoned cheese sauce and served on a toasted Kaiser bun, priced at $5.

“Our brand is so rooted in value, we’re continuing to deliver a clear value at every price point,” Axe said. “It’s about over delivering value at every price point.”

So far, the new offers have been a success with Checkers and Rally’s customers, and Axe said both brands will continue to evolve their burger offerings, especially at the higher end.

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