Are consumers responding to fast food's new value options?

A group of fast food chains, including Starbucks (SBUX), McDonald's (MCD), and Taco Bell, are bringing back value meals to lure customers lost amid inflationary pressures.

Yahoo Finance reporter Brooke DiPalma joins Market Domination to break down the numbers behind foot traffic in these chains and how consumers respond to fast food companies bringing back value meals.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Nicholas Jacobino

Video transcript

Taco Bell is jumping into the value competition.

It is the latest fast food player to join a crowd of chains like mcdonald's Burger King and KFC looking to use value to get consumers back in the door.

Yahoo Finance's Brooke de Palma is here with more Brooke.

How are value and innovation playing a role when it comes to getting consumers back to some of these restaurants, right?

It's all in an attempt to turn around the narrative that consumers think that fast food is too expensive.

So food genes are taking action to combat that narrative as they look to bring customers both back in with value and innovation.

Now to see if it's working, we went out to foot traffic analytics platform, placer dot A I to get a closer look at overall foot traffic trends year to date.

And what we found is that foot traffic is getting a bit of momentum at the end of May to early June underscoring that value and these lower price points seem to be resonating a bit with customers and taking closer look at Taco Bell specifically, as you noted, its value menu just dropped today.

It's $7 it's calling it a lux box.

And then actually plays off the idea of what they said was consumers thinking that fast food is luxurious right now.

Now that box includes a chalupa supreme, a burrito, a taco chips, nacho, and cheese and a medium drink in in case you were curious.

But this promotion did just come out today.

Let's take a look at the recent innovation that they launched with cheese that they launched that collaboration.

In the week of that launch, Taco Bell.

Foot traffic jumped at the highest point so far this year, taking a closer look at Starbucks foot traffic innovation also played a big role for them too.

In early May, Starbucks launched that popping pearls that boba light drink.

And in line with that foot traffic also saw an uptick.

And then in early June, we saw right here, it launched its pairing menus.

So we're beginning to see a slight uptick from that KFC.

Well, they have a lot of catching up to do.

It's still seeing negative foot traffic, but it did rebound from a 14% low earlier this year.

And foot traffic is down nearly 6% following that introduction of its value meal back in April.

But now all eyes are on the month of July.

We wanna know next month and at the end of June to see if these value meals and innovation truly do change the narrative that consumers think that fast food is too expensive.

And if customers come more frequently, they spend more when they do go to these fast food chains.

And if they come back at the end of these value offerings, that's what's key here.

We want to see the return of these customers.

All right, Brooke, thank you for that.

Appreciate it.