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Income disparity is one of our most important but least-discussed chronic problems. As the NPD Group noted last September, 鈥淭he gap between high- and low-income groups is the widest it has been in 100 years, and the share of U.S. consumers who identify with the middle class has never been lower. Like other retail sectors, the restaurant industry is feeling the effects of this cultural and economic phenomenon鈥�Low-income consumers, who are heavier users of quick service restaurants, were most adversely affected by the Great Recession and have less discretionary income to spend on dining out.鈥�

Wendy鈥檚 CEO Emil Brolick didn鈥檛 reference income disparity by name, but he faced up to the issue in discussing Wendy鈥檚 Q2 earnings with analysts this morning. The brand鈥檚 numbers are decent: North America same-store sales up 2.4% at company stores and 2.2% at franchised stores (although how much of that was from price increases wasn鈥檛 disclosed). Company margins are up 40 basis points to 18.2%. Brolick said the Jalape艌o Fresco Spicy Chicken and Ghost Fries LTO launched in April did well even though at $4.99 the sandwich was priced 60垄 above Wendy鈥檚 core chicken sandwiches. Ghost Fries were a premium item as well at $1.99.

But Brolick is sharp enough to recognize a problem. 鈥淲e feel quite good about our core and LTO products while price/value still requires refinement. Finding a consistent price/value message that drives sales, customer counts and profits is our opportunity,鈥� said Brolick, putting his usual bright-side spin on it. 鈥淲e know our Right Price Right Size menu alone is not a sufficient value proposition to consistently attract the value-seeking consumer. So we have testing various value bundles and we are gaining important insights moving us closer to a solution. We expect to see this pay off later in the fourth quarter of this year.鈥�

In answer to an analyst鈥檚 question Brolick got to the meat of the matter, saying 鈥淭here are heavy users of QSRs who don鈥檛 have a lot of disposable income.鈥� He cited data that finds 26% to 28% of QSR customers say their last meal was a value purchase.

Brolick says Wendy鈥檚 sees a consumer shift in favor of 鈥渞elevant bundled meals in the $4 to $6 check range.鈥� These are not customers who bought Jalape艌o Fresco meals, which Brolick conceded could approach $10 depending on add-ons.

So the problem for those QSRs who care about the value tier (Jack in the Box unapologetically ignores low-end price battles and has no budget menu) is to balance the desires to sell premium items to those with more disposable income and to satisfy lower-income diners with budget buys. As Brolick indicated, traditional 鈥渧alue meal鈥� menus aren鈥檛 enough.

Daniel Schwartz, CEO of Burger King parent Restaurant Brands International, recently pledged to analysts that, 鈥淵ou are going to see us having good value and good premium products for our guests every quarter, every year. That鈥檚 what our industry is all about.鈥� But it has given little national marketing support to the King Deals breakfast/lunch menu since it was launched last year, preferring to promote 鈥�2 for $5鈥� deals.

The value/premium balancing act is one of the many problems McDonald鈥檚 Corp. CEO Steve Easterbrook says his chain confronting. During last month鈥檚 Q2 earnings call, Easterbrook said, 鈥淗aving aligned with our franchisees on the need for national price point value platform, we are now making adjustments to our current offer for the rest of the summer. This includes better marketing support and stronger coordination with local messages. We are also evaluating options for longer-term national value platform.鈥�

That summer program has been a series of $2.50 bundles of small fries plus a sandwich (such as a Double Cheeseburger or Filet-O-Fish). With a drink, those meals fit within or below the $4-$6 meal range. But the summer promotion is simply an indication that, like Wendy鈥檚 Right Price value menu, McDonald鈥檚 Dollar Menu & More with its a la carte selections instead of bundled meals isn鈥檛 an attractive enough proposition for value diners now.

That鈥檚 why both McDonald鈥檚 and Wendy鈥檚 are testing new value platforms. McDonald鈥檚 has a fully realized option that it has been testing since June. As BurgerBusiness reported earlier and first, McDonald鈥檚 is testing its 鈥溾�� has a better value offer than the current summer deals. As testing, diners can get a 鈥淪ignature Burger Mini Meal鈥� for $3.99. It includes a new double-patty Signature Burger or Signature Chicken with small fries and soft drink. Other 鈥渕ini meals鈥� include a McDouble ($3.99), Cheeseburger ($2.99), Double Cheeseburger ($3.49) or McChicken ($2.99).

QSRs are losing customer traffic at the low end, not just at the top to fast casuals. Finding a value platform that provides what value-sensitive customers want can make or break a turnaround.