Carl's Jr. debuts Most American Thickburger, breaks $5 price ceiling
Today Carl's Jr. its Most American Thickburger, a burger that is not only caloric, but also pricy at $5.79 compared to its other selections. What does this mean for the future of burger prices?
Carl's Jr. and Hardee's new "Most American Thickburger." Carl鈥檚 Jr. today introduces its Most American Thickburger, a burger that includes a beef patty, a split hot dog, and a layer of Lay's potato chips.
CKE Restaurants/AP/File
Carl鈥檚 Jr. today introduces its Most American Thickburger and most eyes will be on TV spokesmodel Samantha Hoopes or the burger鈥檚 unusual combination of a third-pound Angus beef patty topped with a split hot dog and potato chips. But what quick-service restaurant operators see is a test of consumer resistance to higher pricing. Given the push for higher minimum wages, high beef prices and the continuing crush of operations overhead, price elasticity will be increasingly critical to operators.
Carl鈥檚 Jr. and sibling Hardee鈥檚 have priced the new cheeseburger (at r.) at $5.79 for the third-pound version and $8.29 for a combo. Boom. That doesn鈥檛 just inch over QSRs鈥� longstanding $5 line in the sand for QSR burger prices; it shatters it. With its signature bravado, Carl鈥檚 Jr. ventures where other QSR burger chains have longed to go but couldn鈥檛 pull the trigger.
Last year, Wendy鈥檚聽聽tested a Beef Brisket Cheeseburger priced at $5.99 a la carte. But the Pulled Pork Cheeseburger it ultimately introduced nationally last September was back under the ceiling at $4.99. That鈥檚 the same price it used for the return of the Pretzel Bacon Cheeseburger and Pretzel Pub Chicken Sandwich. The Jalape艌o Fresco Spicy Chicken Sandwich Wendy鈥檚 added last month and the Bacon & Blue on Brioche before it? Both $4.99.
Jack in the Box鈥檚 late-night-only Munchie Meals are $6, but these include sides and a drink. For burgers, Jack has stayed below that $5 price point. The Spicy Sriracha Burger came out at $4.59; the new Buttery Jack upscale burgers are priced at $4.49 or $4.79.
And, of course, McDonald鈥檚 new Sirloin Third Pound burgers (at l.) have joined its menu, priced at $4.99.
The self-imposed $5 ceiling was apparently based on the idea that consumers wouldn鈥檛 spend more than that on a burger. Carl鈥檚 Jr.鈥檚 own 鈥淪ix Dollar Burger鈥� label was based on the idea that you鈥檇 pay that much for a comparable burger at a casual-dining restaurant. But having niched itself in-between QSRs and casual dining, fast casual hasn鈥檛 hesitated to charge $5 and up for a burger. The bottom-run single ShackBurger at Shake Shack is $5.19; the ShackMeister LTO it added in December starts at $6.19. The cheapest option at Smashburger is $4.99 (Chicago prices) and burgers range up to $7.29. The Counter鈥檚 signature burger is $12 and half-pounders can hit nearly $16.
You can debate whether quick-service burgers match the quality of fast-casual or casual-dining burgers. If the necessary perceived value isn鈥檛 there, QSRs will stay below $5. But if Carl鈥檚 Jr.鈥檚 Most American Thickburger is a solid success, watch for the next round of new quick-service burgers to be priced at $5.09, $5.19, $5.49 or higher because leveraging consumers鈥� willingness to pay a little more is really the 鈥淢ost American鈥� thing of all.