Chain restaurants lower prices as economy tumbles
A new bargain dining trend has permeated chain restaurants in the Elon and Burlington communities. Subway, Boston Market and, more recently, TGI Friday's have all hopped on the bargain dining bandwagon by selling lunch and dinner meals for just $5.
A weak economy, desire for profit and increased competition among chain restaurants has caused businesses to change prices.
"It absolutely has to do with the economic environment today," said Angela Proctor, senior director of communications for Boston Market. "Five dollars has become a new vernacular and is a price point that consumers respond to."
Proctor said Boston Market followed the lead of its competition with $5 meals.
"We saw that some other restaurants were leveraging that price point and consumers were responding," she said. "We felt we had an opportunity to offer a better, higher quality meal for $5."
Everyone's jumping on the bargain bandwagon. Subway is pulling it.
"I think we started this trend," said Les Winograde, public relations specialist for Subway. "Our $5 footlong has really resonated with customers."
According to Winograde, a franchisee looking for a way to "boost his business," he decided to put all foot long sandwiches in his store on sale for $5 in 2007.
This new marketing concept reeled in customers and skyrocketed profits. Word of the positive results spread to regional then national headquarters, eventually earning the $5 footlong a permanent spot on the Subway menu.
Competitors noticed Subway's success and chose to implement similar price reductions.
"We know about 90 percent of our guests say that the $5 menu motivates them to visit us more frequently," Proctor said of Boston Market. "We definitely want to keep it permanent."
Subway's profits from the $5 footlongs introduction in 2007 resulted in similar outlooks.
"(The year) 2008 was one of the best years Subway has experienced," Winograde said. "We're selling the same thing people have been eating for years, just for less. It's a winning combination."
Updated May 5, 2009
