News
Arby's takes value menu national
April 11, 2010
Arby's Restaurant Group Inc. has launched its national value menu, the first for the premium-positioned chain.
The new value menu, which features seven items at $1, includes three sandwiches — Junior Roast Beef, Junior Chicken Sandwich and Junior Ham & Cheddar Melt plus a turnover and value-sized Curly Fries, shake and fountain drink. The menu will be refreshed periodically to showcase seasonal favorites and other signature offerings.The new value menu complements the existing $5.01 Combos the company launched in September, according to a news release. The combos feature a choice of one of five full-sized sandwiches, a small order of fries and a small drink for $5.01.
"Our fans have a strong connection to the brand, our great food and sauces and more because we're so unique," said Steve Davis, chief marketing officer, Arby's Restaurant Group Inc. "The value menu offers those fans an affordable way to get their hands on some of Arby's classics."
New creative
To introduce its new value menu the company is playing on its fan loyalty. Arby's new advertising, designed by Merkley + Partners, New York, features fans sharing their stories about why they love Arby's food.
"We designed these spots to help us cut through all of the value menu clutter already out there and feature what sets us apart from the rest of the pack — our food," Davis said.
Arby's first national ad campaign in support of the value menu, entitled "Kaboom," will began airing April 10. It is slated to run in primetime, late night and syndication, during programs such as American Idol, Glee, Dancing With the Stars, The Celebrity Apprentice, Two and a Half Men, The Late Show with David Letterman, and Jimmy Kimmel Live.
The company's cable buy includes networks such as MTV, ESPN, CMT, Discovery Channel, TLC, SyFy, VH1, and TBS. Online initiatives include banner ads across many Yahoo! sites.
Will it work?
The value strategy is one component of Arby's turnaround strategy, initiated by Wendy's/Arby's Group CEO and interim Arby's president Roland Smith. The $1 menu should make up for where the $5.01 Combo Meals have fallen short. When the meal deal debuted last fall, the company counted on the value-priced meal to boost traffic, but the price point wasn't low enough during the recession to drive the incremental traffic the company wanted.In March, Arby's reported system-wide same-store sales in North America were down 11 percent for the fourth quarter.
Tests of the value menu proved more encouraging, Smith said in WAG's latest earnings call. He had reported earlier in the year at the Cowan & Co. Consumer Conference that customers tend to use the value menu items as add-ons rather than a full meal. During test, the value menu did lead to some check erosion but traffic improved, making up for the lower average check and improving same-store sales.
Stuart Morris, owner and operator of QSR Consulting Group Inc., said in an earlier commentary that a value strategy is long overdue for Arby's, but its offering of junior-sized portions may not live up to guests' expectations.
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