Price Wars Heat Up With McD's Rivals
It's a price war! Fast-food competitors are matching or beating McDonald's prices as recession sparks consumers to look for dollar menus. Sonic Corp. rolled out its first $1 menu in December. Sales jumped. Wendy's is running television commercials highlighting its 99-cent sandwiches. Burger King is promoting its dollar items. And Taco Bell beats them all at 89 cents.
What's going on?
Don't these top-level executives from the smaller quick service restaurant chains know that it is futile to compete with the biggest and currently the richest restaurant chain in the world - McDonald's?
"Competitors are trying to attack McDonald's Dollar Menu," says John Owens, an analyst in Chicago with Morningstar Inc. "Consumers are strapped for cash, and the fast-food companies with the best value proposition will win over customers in 2009." [via Crain's Chicago Business]Sonic launches $1 menu in Dec. Photo/Blue MauMau. . . "The level of promotion of value menus has never been higher," says Larry Miller, an analyst in Atlanta with RBC Capital Markets. "We are beginning to have a value menu war." Mr. Miller says the competition is the fiercest he's seen since 1989, when Wendy's pioneered the value menu and Taco Bell, a unit of Kentucky-based Yum Brands Inc., ramped up its low-price offerings. McDonald's took control of the value category with its 2002 launch of the Dollar Menu.
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