The record inflation seen under President Joe Biden has affected everything from cars to food at supermarkets, and now, another industry is feeling the pinch. Fast food chains including Domino’s and Burger King are changing or reducing their menu of discounted items to boost sagging margins.
The moves by the three chains signify American businesses’ newest efforts to tackle inflation, while simultaneously trying to not upset their customer bases, a delicate balance countless businesses have had to make recently, as The Wall Street Journal reports.
With news this morning that wholesaler prices shot up 9.7% year-over-year, and supply chain disruptions continuing in the economy, many businesses raised prices multiple times in 2021 to stay afloat. Customers are taking notice too, with social media coordinator Amanda Smith telling WSJ: “The times in which a person or even a small family could subsist on a dollar menu are, indeed, over.”
Smith is not the only one who feels this way, as Food and Wine.com published a piece recently titled, “Are We Living Through The Last Days of The Dollar Menu?”
Only Eight Wings, Count ‘Em
Value menus, which have been a mainstay of fast-food chains since the late 1980s, have endured economic pressures, such as the 2008 recession, in the past, however the pandemic and subsequent inflation are putting stressors on discount menus like never before—as evidenced by the overall 5.8% price increase in restaurant prices from November 2020 to November 2021, per the Bureau of Labor Statistics.
One of the primary reasons fast food chains are overhauling value menus is because of profit margins. “We expect unprecedented increases in our food basket costs versus 2021,” Domino’s CEO Ritch Allison told the ICR Conference in January. Partially due to inflation, Dominos’ $7.99 carryout will now only be available if it is ordered online—and the carryout deal will only include eight chicken wings, as opposed to the usual 10.
Domino’s CEO Ritch Allison, however, sees the move as a positive, telling the ICR conference, “Moving the effort online has several benefits. One is a higher ticket, two is a lower cost to serve because we’re not having to answer the phones and third is we get access to critical data,” referring to online orders placed over mobile apps.
Popeyes $5 Big Box
Domino’s is not the only company adjusting. Popeyes will keep its Big Box deal at $5 for online orders only, but if the customer orders the Big Box deal in-person, the deal’s cost will be an extra dollar, per CNBC. Little Caesers’ Hot-N-Ready pizza, which has cost $5 in the past, will now cost $5.55, an 11% increase.
To save on the cost of a delivery team, Domino’s is now “tipping” its customers $3 if they pick up an online order themselves.
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