QSRs slash prices as value wars loom
They also face competition from casual-dining brands.
Global fast-food chains are cutting prices on value meals, setting the stage for possible value wars as consumers tighten spending and casual-dining brands push similar deals.
McDonald’s Corp. has launched Extra Value Meals, combining menu staples with sides and a drink, priced around 15% lower than if ordered separately. Pizza Hut, meanwhile, introduced Crafted Flatzz, a limited-edition item sold at under £3.70 ($5) in the US and aimed at solo diners.
“The new proposition from Pizza Hut is aimed at the value segment, which is the right strategy in the current economic conditions,” Maria Vanifatova, CEO at UK-based foodservice insights firm Meaningful Vision, told QSR Media. “People tend to save money and look for better value.”
Despite promotional efforts, the UK fast-food market remains strained. Meaningful Vision data showed footfall traffic up just 0.8% in the first half, whilst like-for-like guest numbers fell 1.3%. Menu prices have accelerated since early this year, squeezing demand.
With fewer customers per outlet and higher prices, quick-service restaurants (QSR) are relying heavily on promotions. Pizza chains in particular are leaning on deals, leaving them exposed to competition from casual-dining brands that are offering similar or lower-priced meals.
About 20% of all pizza menus in the UK consist of meal deals, compared with an average of 17% across the QSR sector. Discounts for pizza average 27%—higher than the 25% norm for fast food.
“In reality, this means that nobody pays the full price for pizza, as there are always deals available,” Vanifatova said in an emailed reply to questions.
The picture is different in Australia, where the foodservice market is showing signs of recovery. Overall foodservice traffic grew 0.2% in the second quarter after six straight quarters of decline, with QSRs leading the rebound, according to US-based market research firm Circana Group LP. Customer visits edged up 0.5% and spending rose 6%.
Here, discounts are driving growth rather than defending against losses. Deal-based occasions lifted spending by 11% and traffic by almost 9%, with afternoon snacking—burgers, chips, ice cream, and frozen drinks—standing out as key drivers.
Not all brands, however, are doubling down on discounting. Domino’s Pizza Enterprises Executive Chairman Jack Cowin told the Financial Review that customers had become overwhelmed by the constant stream of promotions and now expect discounts as the norm.
The company, which posted a net loss of £1.8m (A$3.7m) for the fiscal year ending June 2025, compared with a £44.9m (A$92.3m) profit the previous year, is shifting strategy. Domino’s will scale back discount-heavy marketing and invest more in digital campaigns to lift sales and reframe value beyond price cuts.
For Pizza Hut, the success of value offers like Crafted Flatzz will be assessed carefully. Vanifatova said benchmarks include incremental sales instead of trading customers down, repeat purchases, satisfaction levels, and consistency across markets.
“Success in the US is one thing, but real victory is if Flatzz resonates across Europe, Asia, and emerging markets,” she added.
