Marketing

KFC is making a bet on value

The chicken chain introduced a new line of bundled meal options from $4.99 to $20, but not everything has a consistent price point nationwide, a nod to the complex cost equations around value.
KFC value menu
KFC is coming out with new bundled value meals. | Photo courtesy of KFC.

KFC on Monday introduced a new line of bundled value meals to run through the end of the year, as high prices have kept customers from dining out as often as they would like.

Yet in a nod to the difficult cost environment in some parts of the country, not all the bundled meals have a consistent national price point. And prices will be higher for customers in California, where most fast-food wages just jumped.

The Louisville, Kentucky-based chicken chain will sell a trio of bundled value deals ranging in price from $4.99 to $20. It includes a $4.99 Meal for One that features two pieces of chicken, a drum and a thigh, along with mashed potatoes and gravy, and a biscuit.

There is also a $20 Family Meal featuring six pieces of chicken (two drumsticks, two thighs, one breast and one wing), four sides of customers’ choice and four biscuits.

In between is a Meal for Two, with four pieces of chicken (drumstick, thigh, breast and wing), with mashed potatoes and gravy and two biscuits. But prices for that deal vary by location.

In addition, the company will sell eight pieces of dark meat chicken for $10 every Tuesday.

“We created a value menu that actually has value,” Nick Chavez, CMO for KFC U.S., said in a statement.

Traffic at fast-food chains has been weak over the past year-plus, as rising menu prices coupled with overall inflation have limited the number of times consumers are willing to dine out.

Lower-income consumers in particular have cut back on their dining frequency over the past year, according to Technomic. It’s been 30 years since food ate up this much of people’s incomes, KFC noted, and 56% of consumers are budgeting their finances more due to inflation.

And prices at fast-food chains have become a major focal point on social media, as consumers realized how expensive a night at a quick-service restaurant has become.

Brands have been somewhat reticent to offer broad-based value, however, in part because of concern about those prices in some markets. California fast-food chain restaurants now have to pay their workers a minimum of $20 an hour, which is driving up wages for more experienced workers, too.

Indeed, KFC’s announcement notes that prices for its deals will be higher in Alaska, Hawaii and California, as well as third-party delivery sites—where many restaurant operators charge higher menu prices.

A few brands have started pushing more value, particularly those that do not have a presence out west. White Castle recently announced a bundled deal of its own.

But many brands are keeping their best offers for their loyalty programs, such as Arby’s, which is giving away sandwiches to loyalty members all month. And indeed, digital customers of KFC can get a free 10-piece Saucy Nuggets with a $10 purchase.

KFC may be hoping to inject some energy into its U.S. business. System sales increased just 1.7% last year, according to data from Technomic, and same-store sales were flat in the second half of last year.

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