Our client is a global fast-food restaurant that offers a wide range of breakfast and rest of day products including burgers, salads, fries, and beverages, and offers combo bundles. Over the last ~5 years in the US, our client has seen a relatively flat guest count, but a decline in profitability.
They have launched several
large national advertising campaigns focused on highlighting their "value" products which have not turned around profits the way they had hoped. The head of the US business has asked us to help him understand why gross margin is decreasing, and specifically to take a look at his menu's pricing.
We did some elasticity calculations and have a bit more data on volume impact at different price points for a few key items.
Take a moment and brainstorm the possible risks of this pricing reset.