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Industry Trends
Rethinking Combo Meals
 
Value will continue to be an important concern for consumers. When competing against the local quick service restaurants, adding combo meals to your menu may provide new perspectives on value.

The commercial QSR segment has been known for offering consumers combo meal deals and lower priced value menu options. The focus on lower priced options has been relatively quiet for a number of years, particularly following the recent recession. In an attempt to move consumers away from expecting ongoing steep discounts and to compete more effectively with fast casual operators, many large quick service chains had focused their marketing strategies on quality and more premium product offerings.

Now after spending time focused on weaning consumers off of the steep dealing, the major quick service hamburger chains are back to their roots of offering combo meal deals and consumers are responding.  After several years of declines combo meal visits are growing.
 
Combo meals are reinvented

Combo meals, which previously were three menu items offered at a bundled price, had been declining in popularity for several years because consumers wanted more choices and the ability to customize.

Over the past six months, one chain after another has introduced value-oriented combo meals that offer choices. Wendy’s introduced a 4 for $4 Meal, McDonald’s launched the McPick 2 for $2 offering and then changed the offer to 2 for $5 with a different product offering. Burger King followed suit with a 5 for $4 deal and a number of other QSR chains have added a value proposition of one kind or another to their menu. 
 
New combo meal deals are resonating with consumers

These new combo meal deals seem to be resonating with consumers. For the first time in a long while, combo meals ordered at QSR hamburger outlets for lunch/dinner are on the rise. Combo meal visits at the hamburger category for these main meal occasions rose three percent for the year ending January 2016 compared to the same period a year ago. Simultaneously, visits to the QSR hamburger category for lunch/dinner are down three percent.

Combo meal deals drive traffic

The lift in combo meal visits at QSR burger outlets is being driven by consumers indicating that their combo meal purchase was a deal offer. Combo meals purchased on a deal rose from six percent for the year ending January2015 to seven percent during the same timeframe in the most recent year. While this may seem like a rather small increase, when we consider the size of the hamburger category, this increase translates into a substantial number of combo meal purchases on deal. Specifically, 567 million combo meal visits were reported on deal for the year ending January 2015. For the year ending January 2016 that number rose to 670 million servings – an 18 percent increase. This once again suggests that given the right promotional offer at the right time, dealing can generate positive traffic growth.

Further, combo meal visits that were not reported as part of a deal held fairly steady at 2.8 billion for the year ending January 2016 time period vs. 2015. While not increasing in overall volume, this trend was an improvement from prior years.



The NPD Group is the industry’s leading source for foodservice trends and restaurant market research data. NPD’s CREST® service, which continually tracks consumers’ use of commercial and non-commercial foodservice, assists foodservice manufacturers, foodservice operators, and other foodservice organizations with strategic planning and positioning, product/menu development, and consumer targeting. For more information visit our website at www.npd.com.