Taco Bell aims to shake up quick-service value pricing with the introduction Monday of $2 Meal Deals.
Available as a limited time offer at participating locations nationwide, the $2 Meal Deal includes four choices of either a chicken burrito, a Double Decker taco, a Gordita Supreme, or a Beefy 5-Layer Burrito with a bag of Doritos chips and a medium drink.
The $2 price from the 5,600-unit chain breaks the price barrier of many combination meals at other quick-service chains that typically are priced between $3 and $5. The move also follows a new wave of value-priced offerings throughout all segments designed to build traffic, despite indicators that consumers are willing to dine out more often.
“Our customers have come to expect really amazing value for their money and at most QSRs can typically find one item for one dollar, two items for two dollars, three items for three dollars, as so on,” David Ovens, Taco Bell Corp.’s chief marketing officer, said in a statement.
“Taco Bell is setting out to make big changes to big things and our brand promise with $2 Meal Deal,” he said. “We want to change the way consumers can access value menus by introducing a new and substantially better deal, especially when it comes to a meal.”
Others that have most recently introduced lower-priced meal options include Jack in the Box, for example, which recently introduced a mix-and-match option with three of eight menu items available for $3. Denny’s is currently rolling out its $2-$4-$6-$8 value menu, which has tested well in certain markets, and Pizza Hut and Papa John’s recently have touted $10 pizza promotions.
And once criticized by analysts for backing away from its traffic-driving “3 for $20” promotion too soon, Chili’s Grill & Bar has resurrected the deal as a limited-time offer for E-mail Club members in three states.
Researchers say consumers’ devotion to discounted meals may be a long lingering byproduct of the economic downturn. A recent study by AlixPartners LP found that the number of consumers who expect to pay $5 or less for a meal — what researchers dubbed the “Subway Effect” — has grown significantly post-recession.
Taco Bell said the chain will continue to offer its permanent Why Pay More Value Menu that includes options at 79 cents, 89 cents and 99 cents — items that also offer add-on potential to boost average checks.
Premium products are still promoted at Taco Bell, too, like the Bacon-Ranch and Salsa Roja tortadas for $3.29. The Bacon-Ranch version features a grilled flour tortilla stuffed with chicken, shredded lettuce, tomatoes, bacon and avocado ranch sauce; and the Salsa Roja version is stuffed with chicken, lettuce, fiesta salsa, salsa roja and a blend of cheddar, pepper jack and mozzarella cheeses.
In announcing the $2 Meal Deal, Taco Bell said internal research showed that consumers think combo meals are too pricey and have lost their relevance. Drinks, in particular, were seen as too expensive, the chain noted.
The Meal Deal offer will be promoted this summer through television and radio ads, in-store promotions, Web and social media activities and events tied to the chain’s existing sports and entertainment sponsorships.
Taco Bell is a subsidiary of Louisville, Ky.-based Yum! Brands Inc., also parent to the Pizza Hut and KFC brands.
Contact Lisa Jennings at [email protected].