Are consumers responding to the new low-cost fast food options?

A group of fast-food chains, including Starbucks (SBUX), McDonald’s (MCD) and Taco Bell, are bringing back low-priced menu items to win back customers lost due to inflationary pressures.

Yahoo Finance reporter Brooke DiPalma works at Market Domination to track customer traffic at these chains and examine how consumers are responding to fast-food companies reintroducing inexpensive meals.

Click here to watch the full episode of Market Domination for more expert insights and information on current market events.

This article was written by Nicolas Jacobino

Video transcript

Taco Bell plunges into price competition.

It is the latest fast-food operator to join a number of chains such as McDonald’s, Burger King and KFC that are trying to win back customers with their offerings.

Brooke de Palma of Yahoo Finance is here with more information on Brooke.

What role does value and innovation play in attracting consumers back to some of these restaurants?

The aim is to create the impression that consumers think fast food is too expensive.

Food Genes is therefore taking measures to counteract this myth and wants to win back customers through added value and innovation.

Now, to see if it works, we took advantage of pedestrian traffic analytics platform placer.ai to take a closer look at overall pedestrian traffic trends since the beginning of the year.

And we’ve noticed that there’s a little bit of a pick-up in traffic in late May into early June, which underscores that value, and those lower prices seem to be resonating with customers. If you look at Taco Bell, as you’ve noticed, the deal just came out today.

It costs $7 and is called the Luxbox.

And then the assumption is actually taken up that consumers today view fast food as a luxury.

In case you’re curious, the box includes a Chalupa Supreme, a burrito, taco chips, nacho and cheese, and a medium drink.

But this promotion only came out today.

Let’s take a look at the latest cheese innovation launched as part of this collaboration.

During the week of this launch, Taco Bell.

Customer traffic reached its highest level ever this year. A closer look at Starbucks’ innovations for customer traffic also played a big role for them.

At the beginning of May, Starbucks launched the Popping Pearls drink Boba Light.

And at the same time, visitor frequency also increased.

And then we saw here at the beginning of June that the pairing menus were introduced.

So we can see that KFC is slowly showing a slight upward trend.

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

Visitor numbers are still declining, but the figure has recovered from its low of 14% at the beginning of the year.

The story goes on

And since the introduction of the discount menu in April, customer frequency has fallen by almost 6%.

But now all eyes are on the month of July.

We want to know next month and at the end of June whether these affordable meals and innovations are actually changing the perception that consumers think fast food is too expensive.

And when customers come more often, they also spend more at these fast food chains.

And whether they come back at the end of these value propositions is the crucial point.

We want these customers to come back.

Okay, Brooke, thank you for that.

Am grateful.