The prices that fast-food chains set are always the result of toeing the line between profit and affordability. Many of the customers specifically seek out these restaurants for a cheap way to get a filling meal.
Along with attracting high numbers of people with the low prices, value bundles such as Wendy's (WEN) $5 Biggie Bag and the McDonald's (MCD) $1, $2 and $3 menu are also a marketing strategy that will get customers through the restaurant's doors and then ideally order something else from the main menu.
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Yum! Brands (YUM) -owned Taco Bell also has many boxes, combos and value menu sets of its own. The Cravings Value Menu, in particular, features menu items like the Cheesy Roll Up for $1.19 and the Cheesy Double Beef Burrito for $2.79.
Taco Bell
Here is what goes into Taco Bell's new value bundles
Taco Bell is currently testing a new combo it will call the "Bell Bundle," as first reported by fast-food news outlet Chewboom. Available at a few locations in Toledo, Ohio, the combo meal includes a larger item and a smaller taco alongside the chain's Cinnamon Twists and a fountain soft drink.
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Some of the locations let customers order the bundle with the Steak Quesadilla and Seasoned Beef Chalupa Supreme while others are shown the Mexican Pizza and Beefy 5-Layer Burrito.
The Bell Bundles are a limited-time promotion that will provide Taco Bell with data about how such a deal is being received by customers (Ohio is often the state brands use for market tests to draw average conclusions for the rest of the country.)
On the regular menu, Taco Bell currently has combo meals around the $8-$9 range such as the Chicken Enchilada Burrito Combo and the Cheesy Gordita Crunch Box in which a main item with a more expensive protein like steak or chicken breast is put alongside a drink and a smaller taco or chalupa.
The economy of the meal deal: this is how chains decide on prices
The Bell Bundle is meant to show whether an added dessert will influence some customers to buy the combo. Both through a catchy name and the types of foods offered, any meal deal needs to attract customer attention since the price is similar to other types of value combos already offered.
Even as food inflation has cooled since peaking in 2022, price considerations are an important factor for chains that need to both turn a profit and attract customers who seek out value above many other things.
In one past earnings call, Chipotle (CMG) CEO Brian Niccol told analysts that the chain had started losing some of its lower-income customers after raising prices. While this has not affected the bottom line since the chain saw new customers "scaling down" from eating at full-service restaurants, the lowest-earning category of customers were finding the chain's meals increasingly unaffordable given what they earned.
"What we saw was probably not all that different from what people have been saying," Niccol said in the earnings call. "The low-income consumer has pulled back their purchase frequency. Fortunately, for Chipotle, that is not the majority of our customers."
