Taco Bell May Have the Waffle Taco, but Popeyes Has Chicken Waffle Tenders
As the fast-food wars heat up, restaurants are getting more creative with their menu items. One item that is getting a lot of attention is the waffle. Two restaurant chains that have introduced their own variations of the waffle are Taco Bell, owned by Yum! Brands and Popeyes Louisiana Kitchen . Taco Bell has made the Waffle Taco a centerpiece of its new breakfast menu. Meanwhile, Popeyes is bringing back its popular Chicken Waffle Tenders. Could the waffle be the answer and boost same-store sales for these restaurants? If it is the answer, expect to see more variations of the waffle on many more menu boards.
What are Chicken Waffle Tenders and what's Popeyes' strategy?
Chicken Waffle Tenders are not chicken and waffles. They are tender white chicken breast strips marinated in Popeyes' Louisiana seasonings and then dipped in waffle batter. Chicken Waffle Tenders come with Sweet Honey Maple dipping sauce, French fries, and a biscuit for $4.99. They went on sale at Popeyes on May 26 and will be on sale until June 29.
Popeyes is using limited time offers (LTOs) like Chicken Waffle Tenders to help boost sales. Popeyes' strategy is to use up to nine LTO promotions every year with each one lasting about three to four weeks. Chicken Waffle Tenders are returning to the menu board after they were first introduced last August as an LTO.
The LTO promotion allows Popeyes to gauge a particular item's success and determine if an item should become a permanent addition to the menu. In January, Popeyes introduced Bayou Buffalo Wicked Chicken as a limited time offer. This promotion was designed to appeal to NFL fans during the playoffs and the Super Bowl. In February, Popeyes added spicy and blackened chicken tenders to its menu after successfully promoting the items as a limited time offer.
What's all the excitement over Waffle Tacos?
The Waffle Taco is part of Taco Bell's effort to capture business from McDonald's . Besides the Waffle Taco, Taco Bell's breakfast menu includes Cinnabon Delights, a Breakfast Burrito, A.M. Crunchwrap, and the A.M. Grilled Taco. These items came from the imagination of Taco Bell CEO Greg Creed, who is moving up to become the new CEO of Yum! Brands this January.
To help boost awareness, Taco Bell has embarked on an aggressive media campaign with the aim of shaking up the breakfast time slot. Taco Bell could use the boost. Its system sales were flat in the first quarter, and same-store sales fell 1%. Taco Bell is hoping that its marketing campaign and breakfast will pay off in the current quarter.
Popeyes continues to post impressive results at the expense of KFC
In the first quarter, Popeyes' U.S. same-store sales rose 4.3%, and international same-store sales increased 5.8%. Popeyes' share of the U.S. chicken fast-food market rose from 20.2% last year to 22.3%. Total revenue increased 16%, and the company expanded with 19 new restaurants in the U.S. and eight internationally.
KFC's results were not as good as Popeyes'. KFC's U.S. same-store sales declined 3%. The bright spot was in China, where same-store sales increased 11% for KFC. To turn things around in the U.S., Yum! Brands is looking at a number of options. These include bringing back the Double Down at KFC and launching a new chicken concept called Super Chix. While it's too early to tell if these initiatives will work, it's a sign that Popeyes is gaining market share at the expense of KFC.
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Foolish final thoughts
One thing is for sure: Popeyes is certainly doing something right. It's posting better sales numbers than Taco Bell, KFC, or McDonald's. Popeyes is proving that a fast-food chain can succeed, even in a tough environment. It all comes down to quality menu items at an affordable price.
Popeyes' limited time offer strategy is working as well, and it's not making its menu board too complicated for customers. This is something that McDonald's in particular needs to work on. Hopefully, Waffle Tacos can help make Taco Bell more of a formidable player in breakfast. Either way, this is one Fool who likes seeing variations of the waffle on the menu board and hopes more waffle items are on the way.
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The article Taco Bell May Have the Waffle Taco, but Popeyes Has Chicken Waffle Tenders originally appeared on Fool.com.Mark Yagalla has no position in any stocks mentioned. The Motley Fool recommends McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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