According to the samplers hanging in your finer Mongolian yurts, “If the herring stings when slapped across your face, don’t suggest a flounder.” Actually, I made that up, but you can almost see the scale marks on the faces of fast-food executives these days, so there’s some license to be taken. Besides, all of them should be dispatched to Mongolia if they go ahead with what they’re considering.
Their mackerel moments are the result of setbacks in the efforts of virtually every large quick-service chain to upgrade the quality of its food and operations. Consider the big product introductions of recent months: A high-quality wrap for McDonald’s, a pulled-pork sandwich for Burger King, a big-brand taco and chef-inspired entrees for Taco Bell. Wendy’s whole comeback program is built on the promise of delivering food that’s at least a notch above its competition. The goal is to entice consumers to higher-ticket items, instead of having to provide change when the patron hands them two bucks for a meal.
But now the bunch are wringing their hands and wondering if they should revert to the Great Recession-era prices that desperation forced on them in 2008. Taco Bell is widely reported to be working on a new dollar menu, and Wendy’s is talking to investors about right pricing, which is nothing more than discounting with a slight asterisk.
Reverting to those strategies is a bit fishy. We know now that the two-percentage-point increase in employees’ FICA taxes was a significant cut in consumers’ spending power. The psychological chill likely did more damage. And the uncertainty that prevailed as the government dickered over a budget was a veritable arctic blast.
We shouldn’t forget those factors and abandon a positive strategy for the sake of what should at best be a break-glass-in- emergency tactic. Reverting to deep discounting is only going to delay the industry’s recovery.