McDonald’s, Taco Bell preparing to square off in low-priced menu battle

McDonald's Corp and Taco Bell are squaring off for a new low-priced eats battle with McDonald's to roll out a new Dollar Menu today, and Taco Bell announcing yesterday that it would sell a new item, Nacho Fries, for $1 starting 25 January.

Taco Bell, Irvine-based unit of Yum Brands Inc, added that in addition to the fries it has lined up 19 $1 items that it would unveil this year. It is already selling 20 ''mainstay'' $1 products including certain tacos and burritos.

Wendy's Co also joined in announcing it has expanded the chain's ''4 for $4'' menu to include eight entrees, including burgers and chicken sandwiches. Each entree includes chicken nuggets, a small order of French fries and a drink priced $4.

Jack in the Box Inc also launched ''Value Done Jack's Way,'' this week, with items priced from $1 to $5.

According to commentators, all the moves are aimed at taking away rivals' market share or at least protecting the share they have and increasing sales with so-called value offerings.

RJ Hottovy, an industry analyst at the investment research firm Morningstar Inc points out that even if the chains end up making little profit, in the process, ''it's all about getting people in the restaurants.''

Commentators point out that it had long been been speculated that Taco Bell would launch its international menu item in the US especially after it conducted market tests in West Virginia and California last spring.

As consumers enjoy more and more dining options, restaurants are focusing on value, convenience and quality to stay competitive. Taco Bell has long used limited-time offers and value promotions to gain advantage in the game.

Taco Bell told CNBC that its $1 menu items had fetched it over $500 million in sales in 2017 even as its $5 boxes, which often contain its limited-time offerings, generated an additional $1 billion in sales for the brand.