Value has become the buzzword for fast food brands these days.
Like CNBC reported On Sunday (August 11), restaurant CEOs repeatedly pointed to the value of their restaurants as they explained to investors the reason for the decline in sales, while also presenting their plans to increase customer traffic.
“Value” appeared almost 80 times when McDonald’s held its earnings call in July, the report said, while executives from companies such as Papa John’s and Pizza Hut/Taco Bell owner Yum Brands The value was also mentioned dozens of times in their calls.
“The word ‘value’ has been discussed frequently in recent months,” Josh Kobzathe CEO of Burger king parent company Restaurant Brands International said last week.
The report found there’s a reason fast-food brands are betting on value: According to data from the Bureau of Labor Statistics, restaurant prices have risen 27.2% since June 2019. And that’s led to a decline in restaurant visits and sales as consumers spend less on eating out.
To reverse this trend, Chains like McDonald’s, Burger King And Taco Bell has been offering promotions such as their $5 meal deals.
“In the current economic cycle, consumers are more conscious of their spending and are showing a preference for brands that offer compelling value for money,” said Papa John’s CFO Ravi Thanawala said during the company’s conference call on Thursday.
Yum Brands released its results last week, which show slight decline in saleswhich prompted the company to launch initiatives to appeal to price-conscious guests.
“We ensure that we consumer “Affordable options have been a greater focus of our efforts since last year, as all of our brands have made groundbreaking offerings and introduced or reintroduced the everyday value approach,” said CEO David Gibbs.
“Our brands saw improvement in the U.S. market compared to the first quarter and we continue to refine our offering in international markets to regain similar momentum.”
The decline in consumer spending is not only affecting the country’s fast-food restaurants, PYMNTS wrote last week.
“Consumers think twice before pull the trigger Even when it comes to purchasing everyday items, people are being put off – a reluctance to spend that is translating into economic downturns and headwinds for companies of all types and in all business sectors,” the report said.
These cuts are taking place in areas such as home furnishings, Wayfair reporting a quarterly decline in sales and travel with Disney and observed what was called “moderation” in visits to his parks.
