Hangry customers clearly take fast food seriously, so a new sales strategy for America’s largest chains could really cheer them up.
In January, the largest companies in the United States launched very small menus. Make your fast food cheaper, cheaper than bread, or a juice box.
In December, Credit Suisse financial analysts released a report that the so-called “price war” for fast food in the United States is on the rise. In 2018 McDonald’s launched a new line of products called the “$ 1 $ 2 $ 3 menu” that customers can use to combine three price levels.
Rivals quickly followed. Wendy’s burger chain has also added 20 new products to its menu for just $ 1 each, followed by Tex Mex Taco Bell, which sells $ 1 Nacho.
In the case of McDonald’s, Credit Suisse estimates that the company’s pedestrian traffic in the US. The USA It decreased by 11% between 2012 and 2016. Therefore, the drop in prices in January could be another attempt to restore this traffic.
But how is it possible to earn money with a $ 1 burger, especially if the person serving it can earn around $ 10 an hour?
The answer is scale; Sale of hamburgers, chickens, or french fries in large quantities.
With very few companies at the top, this is the oligopoly market. Companies are working hard to differentiate their products from the competition. For example, mark flames on fried foods or offer toys for children’s dishes.
Finally, competitors begin to devalue themselves in a race for the lowest price. So says Patricia Smith, a professor at the University of Michigan who specializes in fast food economics.
The key to this strategy? Until customers buy many items at a reduced price.
Some of the basic requirements needed to be taken into consideration before participating in the TalktoWendys Survey are
- Access to the electronic device with a stable and good internet connection.
- The purchase receipt of the last visit to the TalktoWendys.
- Your age must be above 18 if you are participating in the TalktoWendys Survey.
- Your purchase receipt must have a survey code printed on it.
- TalktoWendys Survey demands your honesty. It is necessary that you answer each and every answer to this survey honestly.
You can participate in the TalktoWendys Survey only at the official website of Wendy’s. Also, it is necessary to answer each and every question of the survey to claim the survey rewards.
McDonald’s will make money if you sell hamburgers for a dollar if you eat hamburgers for less than $ 1 and you can sell many, many hamburgers, says Smith, who says selling additional items is also important. Part of the strategy is to entice consumers to the store and encourage them to buy more than just hamburgers: fries, drinks, desserts.
Price cuts to attract customers can backfire if the cuts reduce food and production costs and take advantage of the profits. Some owners of the De Burger King franchise sued the company in 2009 over a commercial concession to help franchisees sell a $ 1 double cheeseburger, which costs $ 1.10. The court chose Burger King.
The success or failure of this latest round of price cuts can depend on many factors, including the development of the fast-food industry.
But how can it be a viable business strategy when food prices on the menu are lower than the cost of ingredients to prepare meals?
According to NYU Nestlé, the fast-food economy depends on the workload. The goal is to get customers to enter the store. The happier they are, the more they will be, he says.
This tactic can strengthen brand loyalty and steal customers from other channels. If TalktoWendys suddenly lowered its prices, it could become an unconditional Wendy to lower it and keep up with the lower prices.