Quick-service restaurant customers have been frustrated by rising Big Mac and chicken sandwich prices, which we dubbed 'McFlation.' As burger sales slide, chains like McDonald's and Burger King have swiftly introduced meal deals to maintain market share amid a worsening downturn among consumers, especially low/mid-tier ones.
With McDonald's and Burger King already offering $5 meal deals, it was inevitable that Yum! Brands' KFC would introduce its own $5 deal, signaling that the value wars in the QSR space are intensifying.
"KFC claps back in "Value Wars" with more deals for customers every day of the week this fall," KFC wrote in a press release on Monday morning.
KFC's new $5 meal deal includes "finger-lickin' good value and make KFC affordable for everyone," the company said, adding the new deal includes three offers: KFC Chicken Nuggets, Famous Bowl with KFC Chicken Nuggets, and Two-Piece Drum & Thigh.
"As customers are looking for more value from brands, we're expanding our Taste of KFC lineup with new KFC fan favorites like our nuggets and Famous Bowls, each for just $5," Nick Chavez, CMO, KFC US wrote in a statement.
Chavez said, "These Taste of KFC Deals offer three choices – with something for everyone – at an incredible price."
We suspect additional QSRs will soon offer meal deals, as corporate America has already warned numerous times about a consumer downturn on earnings calls.
Take, for instance, the number of times "consumer downturn" was mentioned on earnings calls, spiking to six this earnings season, the highest level since GFC.
The number of times "cautious consumer" was mentioned 33 times, a record high.
"Consumer pressure" mentions still lingers near record highs.
Across industries—from luxury brands, airlines, and travel companies to fast-food chains, theme parks, and consumer goods companies—management teams have signaled profit warnings due to a consumer slowdown that continues to gain momentum.
Low/mid-tier consumers seem to have reached their limit in absorbing price hikes on goods and services, thanks to depleted personal savings and maxed-out credit cards. This is due to elevated inflation and high interest rates under Bideonomics.
Also, the second quarter has displayed unmistakable signs of a consumer slowdown, with the latest credit card data from the Federal Reserve also indicating that some consumers have hit a proverbial 'brick wall.'
Even VP Harris recently admitted at a campaign rally that a cost of living crisis persists. So much for Bidenomics...
QSRs offering meal deals only reflect an economy trending in the wrong direction. The mid/low-iter consumer has tapped out under failed Bidenomics.
