Welcome to the newest edition of The Why. “Why are McDonald’s and Wendy’s phasing out the dollar menu?” Good question. (OK, it’s a little “Money magazine” but again it beats answering inquiries about assorted, odd intimate acts. Seriously? We thought “The Pig Roast” was just an experimental pork menu item at McDonald’s, mmmkay?)
They’re no doubt phasing out an actual dollar menu because they want to make more money. If you’re gonna be forced to pay seniors who should already have pensions, students who live at home with mom and dad and dumb@sses who can’t manage to get a raise and/or a new job, then your company needs to find a new way to make more money.
Our guest speaker Brad Tuttle, contributor to Time online, agrees that “all signs indicate the dollar menu is being phased out.” He adds: “The world’s fast-food giants would very much like to kill the dollar menu. “
So why are McDonald’s and Wendy’s phasing out the dollar menu? Tuttle confirms it’s about money. He states:
“In the hopes of pushing average customer bills higher, the big players have been easing away from items that cost a mere buck. McDonald’s and Wendy’s both replaced their dollar menus in recent years with value-oriented sections called the Dollar Menu & More and Right Price Right Size Menu, respectively, where items might cost $1, $2, $3, or even $5. “
What about Burger King you ask? Tuttle reports: “Burger King recently warned that increasing the minimum wage could destroy the fast-food dollar menu entirely, with the idea that it would be impossible to keep serving low-price items while covering higher employee costs.”
He agrees they are all concerned revenues are hurt if customers continue to “order off the cheap side of the menu.” Taco Bell is using another strategy. Since last year their “Dollar Cravings” menu has “a dozen or so items priced around $1 apiece; most are so small that (you) need to order a few to fill up.”
The giants are phasing out the dollar menus because they have a target minimum they want everyone to spend. Tuttle confirms this as well saying: “Several fast food outlets have settled on $5 as the magic price point: A full meal that costs only five bucks is viewed as a terrific value.” (Even pizza places such as Little Caesar’s is doing the $5.00 thing.)
Tuttle agrees. He concludes, interesting ad campaigns aside, “fast food companies prefer this new approach in that it all but guarantees customers are spending more than the measly $1 or $2 they might have otherwise had the dollar menu options been better. “
Why are McDonald’s and Wendy’s phasing out the dollar menu? Now you know.
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