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It’s a summer for single-digit dollar deals as IHOP and Denny’s join other big-name food chains in offering value menu options. The two companies are the latest restaurants trying to appeal to consumers being more selective with their dollars in the wake of price increases.
IHOP announced this week that it is bringing back its $5 all-you-can-eat pancake deal. The promotion, which runs until September 15, is meant to align with back-to-school season when “wallets are pinched from shopping,” the company said in a statement. IHOP announced the same promotion with much fanfare around the same time last summer as part of its 65-year anniversary.
And family dining chain Denny’s is hot on its heels, announcing Tuesday that it would offer meal options for as low as $2 as part of its returning $2-$4-$6-$8 value menu. Denny’s last held the promotion in 2020 for its 10th anniversary, and it was touted by its executives as a “consumer-friendly traffic-driving platform” in a June earnings call.
The move makes IHOP and Denny’s the latest food joints, after McDonald’s, Taco Bell, KFC, Wendy’s and others, to roll out single-digit value meals as part of an effort lure in price-weary customers.
With inflation still running higher than normal, consumers have been warier of spending their dollars on increasingly pricey quick food. Starbucks, for example, reported a second-straight quarter of sales declines.
And earlier this year, disgruntled customers pushed back against McDonalds’ prices hikes, taking to social media to express outrage over a single hash brown costing $3. Weaker-than-expected sales eventually forced the fast food chain to bring in value meal promotions and focus on affordability.
“The industry is really in a state right now where consumers have pulled back pretty significantly because prices have just gone up so far, so fast,” said David Henkes, a senior principal at Technomic, a food industry research and consulting firm, in an interview with CNN. “This is just part and parcel of what the restaurant industry is trying to do to win back consumers and to enhance their value perception.”
Restaurants have been faced with rapidly decelerating foot traffic, Henkes said. He says that IHOP’s dine-in only deal is meant to spur customers into returning to stores.
“The first step is to get people in the restaurant, and that’s what a lot of these value meals are meant to do,” he said. “As a restaurateur, you hope that they’re not just taking advantage of the deal, they’re buying extras, they’re adding on sausages or some other breakfast meat.”
