Five dollars is, for fast-food companies, often the dividing line between regular prices and what customers consider a good deal.
Sandwich chain Subway ran its "$5 Footlong" promotion for years, while Restaurant Brands International (QSR)'s Burger King has the $5 Your Way Deal with a Double Whopper Jr., 4-piece nuggets, small french fries, and small drink.
But with inflation sending the costs of many common foods soaring, offering anything substantial for $5 is becoming a lot less sustainable. The $5 Footlong was scrapped in 2021 while Burger King has been inching toward a $6 Your Way Deal with a bacon double cheeseburger, 9-piece chicken fries, and value fries.
The Biggie Bag (And Other Promotions) Are Back
Wendy's (WEN) has also been pulling and bringing back its $5 promotion. After a brief summer pause, the burger chain brought back its popular $5 Biggie Bag -- a choice of a junior bacon cheeseburger, a crispy chicken BLT or a double stack burger alongside small fries, a small drink, and a four-piece order of nuggets.
The $5 Biggie Bag is a fan favorite and regularly appears and reappears with slightly different side combinations. An earlier Biggie Bag combo had only the bacon double stack as the choice of burger.
Other promotions launched by Wendy's include a football season promotion that gives those who spend $10 on the Wendy's app a complimentary large fries throughout the month of September.
The chain's latest buy-one-get-one-free offer has been changed to the Sausage, Egg and Cheese or Bacon sandwich and the Egg and Cheese Biscuits, while those who order homestyle French Toast Sticks alongside one of these sandwiches will earn double the rewards points.
In honor of back-to-school season, Wendy's is renewing its $1 BOGO sandwich deal for those who order in-app.
"Now you AND your favorite teacher (or classmate) can enjoy BOGO $1 premium sandwiches when you order in-app!" the company said in its usual push to get more customers to use its app.
Fast food, which for years has provided solutions for low-income families looking for a cheap meal, has been growing significantly more expensive. The price of food rose by 8.6% between July 2021 and 2022 and, in the last six months, many fast food brands have raised their prices as well.
During Inflation, Combo Deals Are Very Important
McDonald's (MCD) recently said it had to raise prices by approximately 6% in reaction to the rising costs of food, labor, and supplies needed to cook its burgers, while Keyblanc analysts estimated that Chipotle (CMG) increased the price of its steak and barbacoa entrée by 6.2% at many locations.
But price increases have definitely not led to decreases in these locations. A recent report by data analytics company Placer.ai found that Chipotle's foot traffic rose by 14.6% year over year in June and 23.3% in May.
Chipotle CEO Brian Niccol recently said that "higher-income" customers made up a large portion of its customer base.
"What we saw was probably not all that different from what people have been saying," Niccol told analysts during a July 26 earnings call. "The low income consumer definitely has pulled back their purchase frequency. Fortunately, for Chipotle, that is not the majority of our customers."
This may be because wealthier customers who may have more to spend are instead turning toward fast-food companies. A recent study from insurance company Breeze found that 73% of US households recently cut back on restaurants and takeout while 57% spent less on grocery as a way to combat inflation.
Those earning the least, then, are relying on the combos.
