Fast-food chains are locked in a fierce battle that has them practically giving food away. McDonalds, Wendys,

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Question:

Fast-food chains are locked in a fierce battle that has them practically giving food away. McDonald’s, Wendy’s, Burger King, and others are constantly trying to lure customers at the low end of the price spectrum with tempting menu options that can serve as a snack or a meal. Although this technique is nothing new, it’s more popular today than ever. The tactic has even found its way into full-service restaurant chains such as Olive Garden.

After viewing the video, read the articles, then thoroughly answer the following questions:

Video: (Links to an external site.)

Read: As Fast Food Price Wars Heat up, New Menu Items Set the Tone (Links to an external site.)

Read: Wendy’s Margins Squeezed as Fast-Food Price War Continues (Links to an external site.)

Read: Pizza Hut Enters the Fast-Food Price War With $5 Menu (Links to an external site.)

Read: American Chain Restaurants Had a Tough Year and 2019 Looks Worse (Links to an external site.)

Questions

1. Why are restaurant chains employing a discount menu as a pricing option?

2. What are the possible negative outcomes of employing a discount menu strategy?

3. Are bargain-basement options a sustainable path for restaurant chains? Thoroughly explain and support your response.