The Current Economic Recovery is so Bad that Fast Food Restaurants have to Increase their Dollar Menu Offerings

Posted by PITHOCRATES - January 5th, 2013

Week in Review

While the Obama administration, their economists and those in the mainstream media celebrate job creation month after month the official unemployment rate (U-3) remains at 7.8%.  Worse, the better gauge of how awful the economy is, the U-6 unemployment rate, is holding steady at 14.4%.  Which says a lot about the horrible economic policies of the Obama administration.  But these numbers still seem a little abstract to most.  So here is a summary of the current economic climate most people will be able to understand.  At least, if they eat at fast food restaurants (see Wendy’s Doubles Down on Dollar Menu by Martha C. White posted 1/3/2013 on Time).

Although it bumped Burger King out of second place by positioning itself as a more upscale fast-food burger chain, now Wendy’s is supersizing its value menu by adding a second tier of under-$2 items in addition to a core group of 99¢ offerings.

The company missed analysts’ earnings expectations last quarter, while rival McDonald’s recovered from an October dip in sales by heavily promoting its dollar menu. (The thousands of McDonald’s stores that stayed open on Thanksgiving helped lift sales too…)

In a conference call last month, president and CEO Emil Brolick told investors, “We have lost some share in the value-menu area,” and said  the new menu would help the company reverse that slide…

According to research firm Technomic, Wendy’s took the No. 2 spot from Burger King among fast-food burger brands last year. Helped along by Burger King’s sluggish response to changing tastes among fast-food diners, Wendy’s stole the King’s crown by focusing on higher-end (and higher-priced) items like bigger, more natural-looking patties and specialty sandwiches like an asiago ranch chicken club.

The problem was, it got almost too good at aligning itself with the higher end of the market. “The new menu is intended to better balance Wendy’s overall menu, which had gotten top-heavy through [the addition] of higher-priced sandwiches,” Burger Business observed.

“We do believe that the number of price-value-sensitive customers out there is not insignificant,” Brolick told analysts. He’s right. Bonnie Riggs, a restaurant-industry analyst at research company NPD Group, says fast-food diners, especially those under 35, are abandoning combo meals in favor of the dollar menu to save a few bucks.

Fast food is not only fast it is also inexpensive.  So if fast food has to offer lower-priced items to entice people into their restaurants you know the economy is bad.  Which it is.  Bad.  However you want to measure it.  This economic recovery is so bad it is as if we’re still in the Great Recession.  Why?  Because this administration’s policies are not business-friendly.  So businesses are not hiring.  Or only hiring people part-time to escape some of their expensive anti-business policies.  Like Obamacare.

And there is worse to come.  Without having to worry about reelection President Obama has no reason to compromise with Republicans.  Which means only one thing.  Americans will be buying ever more off of these dollar menus.  As it is the most they can afford thanks to the horrible economic policies of the Obama administration.


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