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Burger King is now studying whether its new dollar double cheeseburger can bring that leftover change into the coffers. The chain is testing the sandwich in a few undisclosed markets. It usually sells for more than $2.
The chains contend they aren't interested in a low-price battle similar to the one waged in the 1990s. But current ad campaigns and promotions suggest the competition for cash-strapped customers will be heated.
"We wanted to better understand the power competitive advertising would mean to us in terms of traffic generation," said Russ Klein, president of global marketing, strategy and innovation at Burger King.
Klein said McDonald's success with its dollar double cheeseburger is a reason Burger King put one on its dollar menu. He noted, however, that the Burger King double cheeseburger is 30% bigger than the one at McDonald's. The comparison has been a central theme of the company's marketing campaign so far.
"We know we have a superiority claim," he said.
Wendy's introduced a 99-cent double cheeseburger last month called the Stack Attack, coinciding with a national advertising campaign.
The push toward offering more quantity for less money is extending beyond the burger chains. Yum Brands' (YUM, news, msgs) Mexican-style restaurant chain Taco Bell is promoting its Gordita Supreme product -- one of the largest menu items -- for 99 cents this month. It usually sells for more than $1.50.
And the privately held Quiznos sandwich chain launched a line of $2 small flatbread sandwiches called Sammies in November. The chain also offers a combo meal that comes with two Sammies, a medium drink and either chips, a side salad or a bowl of soup for $6.
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"We accelerated it primarily because of what we saw coming ahead with the economy," he said.
The Sammies are one of the few value choices that are lower calorie -- all are under 300 calories. Although the other chains have introduced healthier menu items in the past few years, those rarely are part of the value or dollar menu.
CKE Restaurants (CKR, news, msgs), which operates Carl's Jr. and Hardee's, isn't offering any 99-cent products. The company takes the opposite strategy with its pricing, counting on its big, premium sandwiches for "young hungry guys" to expand sales.
Chief Executive Officer Andrew Puzder said value menus can result in a lowering of quality -- something he's not willing to sacrifice.
"What can you sell for 99 cents? The bun?" he said.
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Trading down to McDonald'sConsumer belt-tightening is driving business to burger chains, partially at the expense of sit-down restaurants, says a McDonald's executive.
But with commodity costs rising, making lower-priced sandwiches without affecting quality isn't easy.
"The double cheeseburger for us is 4.4 ounces of beef," said Burger King's Klein, adding the Whopper Jr. -- a mainstay of the chain's current value menu -- has half that amount of meat. "So from a sheer cost-of-goods basis, it's pretty evident it would have a less attractive cost-to-goods proposition."
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