In 2018, about half of the brand’s marketing calendar featured promotions the company defined as “value-priced.” This year: more than 80 percent are planned.
In Q2 already, Jack in the Box offered a $4.99 Sourdough Patty Melt Combo and a $4 Fish Sandwich combo. That kind of indulgent, differentiated value has been a Jack in the Box staple over the years. Yet is it enough for today’s guest?
The chain is pushing forward with bundles that showcase premium items and new news, like LTOs, as well as indulgent snacks and sides that sit around $3. How it tells the value story upfront will be critical, too. For instance, Jack in the Box recently witnessed a significant sales and transaction gap with premium items sold alone compared to in bundled format. Simply, the latter returned much sweeter results. Comma said that could change long term, but right now, it’s working, and Jack in the Box would like to see more franchisees adopt the structure.
In regards to the add-on strategy, Comma said, customers often pick snack or side items on their own to access a low price point. But more frequently, they tack them on to different combos or an entree, which drives average check
This is especially important for Jack in the Box given its unique brand equity. Unlike many chains, it splits its base pretty much evenly between value-oriented customers and those who associate its menu with “more craveable, indulgent” items they can’t find elsewhere in fast food.
“And so when we put the indulgent snack or side out there, the value consumer has a high take rate, because it's cheap, but the more crave-hunting consumer takes it as an add-on, because they're not so price-sensitive, they're just looking for that indulgent item that fills that need,” Comma said.
He added that value is “probably the No. 1 situation that we’re dealing with.” And it comes down to what’s happening elsewhere in the restaurant industry.
Those chains that are winning are essentially doing one of two things, he said. They’re selling a lot of a la carte items cheaply, and have a lot of brand equity in that space—customers know they can stretch their buck there; or they are selling abundant value where guests expect a significant amount of food for the dollar.