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Taco Bell to Introduce Dollar Menu Nationwide

Aug. 18 (Bloomberg) -- Bloomberg’s Eric Chemi examines what American are eating for breakfast with Erik Schatzker and Alix Steel on "Market Makers." (Source: Bloomberg)

Taco Bell (YUM), mimicking a strategy used for years by McDonald’s Corp., is introducing a dollar menu nationwide for the first time.

The Mexican-food chain will roll out the new Dollar Cravings menu with 11 items on Aug. 18, including a chicken mini quesadilla, spicy tostada, potato soft taco and cinnamon twists, the company said in an e-mailed statement yesterday. Taco Bell, owned by Louisville, Kentucky-based Yum! Brands Inc., had tested the menu on a more limited basis last year.

Restaurant chains are introducing new and discounted fare to attract American diners on a budget, ratcheting up competition among fast-food companies. McDonald’s recently began selling a $2 jalapeno burger, while Burger King Worldwide Inc. (BKW) is advertising a two-sandwiches-for-$5 deal. Taco Bell introduced a high-protein menu earlier this year and rolled out breakfast foods to all its U.S. locations.

McDonald’s last year changed its iconic Dollar Menu, introduced in the U.S. in 2002, to the Dollar Menu & More, which includes items for $1, $2 and $5. Restaurants have recently been under cost pressure because of rising prices for beef and pork. The new Taco Bell menu, which replaces its Why Pay More! lineup, only features $1 items.

Shares of Yum, which also owns KFC and Pizza Hut, have been underperforming their peers. The stock has lost 5.5 percent of its value this year, while the Standard & Poor’s 500 Restaurants Index declined 1.3 percent.

Taco Bell’s same-store sales rose 2 percent in the U.S. last quarter. The chain has about 6,000 locations.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net Stephen West

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