Are Consumers Responding to New Fast Food Options?

A group of fast-food chains, including Starbucks (SBUX), McDonald’s (MCD) and Taco Bell, are bringing back value-added meals to attract customers lost to inflationary pressures.

Yahoo Finance reporter Brooke DiPalma joins Market Domination to break down the numbers behind foot traffic at these chains and how consumers are responding to fast food companies bringing back value meals.

For more expert insights and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Nicolas Jacobino

Video transcription

Taco Bell is entering the value competition.

It’s the latest fast-food player to join a host of chains like McDonald’s Burger King and KFC that are looking to use value to bring consumers back in the door.

Yahoo Finance’s Brooke de Palma is here with more Brooke.

How does value and innovation play a role in bringing consumers back to some of these restaurants, right?

All of this is aimed at reversing the narrative that consumers think fast food is too expensive.

Food genes are therefore taking steps to combat this narrative by seeking to bring customers back with value and innovation.

Now, to see if it works, we went to foot traffic analytics platform, Placer dot AI, to take a closer look at overall foot traffic trends to date.

And what we’ve seen is that foot traffic picks up a little bit in late May and early June, which highlights that value and these lower prices seem to be finding some resonated with customers and taking a closer look at Taco Bell in particular, as you noted, their value menu just came out today.

It’s $7, it’s called a deluxe box.

And then, actually, it plays into the idea that they think consumers think fast food is a luxury right now.

Now this box includes a chalupa supreme, a burrito, taco chips, a nacho, cheese, and a medium drink in case you’re curious.

But this promotion just came out today.

Let’s take a look at the recent innovation they launched with cheese and started this collaboration.

In the week of this launch, Taco Bell.

Foot traffic was at its highest level so far this year, and a closer look at foot traffic innovation at Starbucks also played a big role for them.

In early May, Starbucks launched the Boba Light Drink with Popping Pearls.

And along with this, foot traffic has also seen a slight increase.

And then at the beginning of June, we saw him right here, he launched his menus of agreements.

So we’re starting to see a little bit of an increase in the share of this KFC.

Well, they have a lot of catching up to do.

Foot traffic is still negative, but has rebounded from a low of 14% earlier this year.

And foot traffic was down nearly 6% following the introduction of its value meal in April.

But now all eyes are on July.

We want to know next month and at the end of June if these quality meals and these innovations are really changing the narrative that consumers think fast food is too expensive.

And if customers come more frequently, they spend more when they visit these fast food chains.

And if they come back at the end of those value offerings, that’s what’s key here.

We want to see the return of these customers.

Alright, Brooke, thanks for that.

Enjoy it.

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