During Jack in the Box’s Q2 earnings call, CEO Darin Harris echoed what many other quick-service leaders have in recent weeks—expect value, and lots of it. That’s the situation the industry is now facing as price-conscious consumers seemingly turned their back on restaurant occasions to begin 2024.

One of Jack’s biggest strategies is the Munchies Under $4 platform. The initiative is meant to accomplish three things: provide a strong value message, align with the brand’s attachment and upsell strategies, and support digital channels. Harris understands this type of offer isn’t reinventing the wheel. Other chains are leaning into national value platforms too; Wendy’s has the $5 Biggie Bag and 2 for $3 Biggie Bundle at breakfast, Burger King has the $5 Duos, Domino’s has $7.99 carryout and $6.99 Mix and Match deals, and McDonald’s is nearing a $5 combo meal too. As Harris told investors, “We know the competition is doing that. So we will be in that game and we are preparing for it.”

“We in the industry are all seeing this kind of pressure from the headwinds of the consumer,” Harris said during Jack’s Q2 earnings call. “We definitely felt it coming into the second quarter and so we know that value is going to be something we talk about for the rest of the year.”


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Harris also emphasized that Jack doesn’t view value solely through lower prices. He said it’s about “what you get for what you pay.” For example, the chain’s larger Fan Favs Box—featuring Tiny Tacos, onion rings, curly fries, mini churros, and Jack dips—is greater than $10 but could be seen as a value play for some consumers because of how much is part of the offering.

The CEO shared the same philosophy around Jack’s premium Smashed Jack, which costs more than $8 as a single burger and over $10 as a combo. The burger soft launched without media at the beginning of 2024, but only lasted a few weeks before it sold out. A restaurant in San Luis, Arizona, sold more than 1,000 burgers in a matter of weeks. The Smashed Jack broke the record for the highest launch week sales of any burger product in at least the past six years.

The plan was to relaunch the product in February with full marketing support, but an unexpected supplier issue temporarily stalled the rollout. The delay pushed the release to March 15, about four weeks later than planned. This Smashed Jack error, in combination with macro headwinds, impacted same-store sales results, which dipped 2.5 percent in the second quarter. When it returned in Q2, the menu item drove a high-single-digit mix and improved average check by 200 basis points. Harris described consumer scores as “outstanding” and added that Jack is looking to further innovate and develop new builds using the quarter-pound seasoned 100 percent beef smashed patty.

“Our premium items, if you think about Smashed Jack for the right guest, that’s one of the more premium price points we’ve had on the menu and it’s doing extremely well,” Harris said.

Jack’s Q2 comps decline consisted of a company-owned decrease of 0.6 percent and a franchise drop of 2.6 percent. The brand felt a decrease in transactions as well as an unfavorable mix shift, offset by 5 percent pricing. In Q3 to date, corporate units have been positive, and sales continue to improve. Franchises have gotten better, but aren’t in the black just yet.

The chain is planning several initiatives to help regain systemwide positive sales in the back half of fiscal 2024. In two weeks, the brand will concentrate on its late-night daypart with the return of its Chicken Tater Melt. Jack will promote that launch with rap artist and actor Ice Cube. The product, called Cube’s Munchy Meal, will be supported by a media campaign on television and social media channels. Additionally, at the end of May, the company will launch wings systemwide. A product test in November drove transactions and positive feedback from customers. Jack will first promote wings via digital and social and then support the menu item with a major campaign. For breakfast, the company aims to drive sales by making French toast sticks a permanent product.

“Despite the challenging consumer environment, I’m excited by what this team is creating to connect with guests and drive transactions. And as you can see, our second half marketing and promotional calendar is robust and will occur as we lap easier comparisons from a year ago,” Harris said. “We will lead with value and follow with innovation while communicating in our own unique Jack way.”

Meanwhile, Jack’s unit development strategy keeps growing. The brand signed franchise agreements in Q2 to enter Tallahassee and grow in Orlando. The burger giant currently has 31 restaurant commitments in the Sunshine State. For new markets opened in the past 12 months—Mexico, Louisville, and Salt Lake City—restaurants are averaging around $100,000 per week, or $5.2 million in annualized AUV.

Jack finished Q2 with 2,195 locations after opening a net of three units.

Del Taco’s same-store sales dropped 1.4 percent in Q2, comprised of a 1.1 percent decrease for franchises and a 1.8 percent dip for company-owned outlets. The Mexican concept ended the quarter with 595 restaurants.

Burgers, Fast Food, Finance, Franchising, Growth, Story, Jack in the Box