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Wendy's adds Deluxe Value Meals

DUBLIN Ohio Seeking to fortify its menu with more pricing variety, Wendy’s kicked off advertising this past weekend for its new Deluxe Value Meals, which are being offered for a suggested $2.99 in participating locations.

The meals, which combine a small drink and a small order of fries with either the Crispy Chicken Deluxe or the Double Jr. Cheeseburger Deluxe, will occupy the middle ground between the chain’s Old Fashioned Combos and the Super Value Menu, which Wendy’s pioneered in the 1980s.

Wendy’s spokesman Denny Lynch said Tuesday that the Deluxe Value Meals are a limited-time offer and that there were no plans for any permanent “Deluxe Value Menu.” However, he declined to speculate whether similar combos were in the works.

The move by Wendy's reflects the strategy now popular in quick service to provide options at several price tiers in an effort to snag both bargain hunters and casual-dining customers who have traded down during the recession.

Wendy’s also has tried to balance the value message inherent to the Super Value Menu with new premium items like the Bacon Deluxe and the quality focus in its newest “You Know When It’s Real” branding campaign. Wendy’s situation resembles McDonald’s efforts to juggle promotions for its Dollar Menu, Angus Third Pounder burgers and McCafe espresso drinks, or Subway’s balancing act between $5 Footlongs and big-ticket subs like the Big Philly Cheese Steak.

The sandwiches offered in Wendy's new value combos differ slightly from their counterparts on the Super Value Menu. The Crispy Chicken Deluxe has cheese and applewood-smoked bacon, unlike the value menu’s Crispy Chicken Sandwich. The Double Jr. Cheeseburger Deluxe has an additional patty and more toppings than the value menu’s Jr. Bacon Cheeseburger.

Lynch also pointed out that the small fries and small drink servings in the combo meals are bigger than the servings on the Super Value Menu, which are “value” sizes generally offered for 99 cents apiece.

Christopher O’Cull, an analyst with SunTrust Robinson Humphrey, wrote in a research note Tuesday that one of the quick-service segment’s biggest opportunities for sales growth in the coming year would be to find a more profitable low-cost promotion beyond dollar menus.

“The impetus behind this effort will likely come from frustration among franchisees (e.g. the Burger King infighting),” O’Cull wrote. “Assuming price-led value plays an important role in 2010, a value combo strategy embraced by large chains could help to alter the financial outcome of the segment during 2010.”

O’Cull referred to the lawsuit filed against Burger King Corp. by its franchisee association, in which franchisees claimed they lost 10 cents for every double cheeseburger that the franchisor required them to sell for $1. Wendy’s is not dictating that its operators to sell the Deluxe Value Meals at the advertised price, and Lynch stressed that the deals would take place only at participating restaurants.

Lynch declined to specify how long the testing process for Deluxe Value Meals lasted or in how many markets it had been conducted.

“It’s a new idea on the national level,” he said, “but local markets have had the opportunity to run this promotion for years. What’s different is we have two sandwiches now. To offer the hamburger or the chicken sandwich is a nice little extra twist and an added value for our customers.”

Dublin-based Wendy’s, a 6,600-plus-unit division of Atlanta-based Wendy’s/Arby’s Group, will support the new combo meals with network and cable TV commercials, which started running last Friday, mostly during televised sporting events.

Contact Mark Brandau at [email protected].

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