Jack in the Box keys in on quality

by Eric Schroeder
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Jack in the Box buttered split-top bun
In early February, Jack in the Box rolled out a new buttered split-top bun as part of it's “Declaration of Delicious" initiative.

BOSTON — Delivering a powerful product quality message is just one way that quick-service restaurant chains like Jack in the Box can connect with consumers. For the San Diego-based company the connection has meant upgrades to its buns and sauces.

Lenny Comma, Jack in the Box
Lenny Comma, chairman and CEO of Jack in the Box

“Fast casual changed the game,” Lenny Comma, chairman and chief executive officer of Jack in the Box, said during a March 9 presentation at the UBS Global Consumer Conference. “And I think that QSR is finally responding en masse. I don’t believe that the improvements in quality are going to change everyone’s strategic position. I don’t think that we’re all, all of a sudden, going to be attempting to be fast casual restaurants. However, the consumer expectations are higher, and it behooves all of us to invest in quality going forward.

“I think what you’ll see, though, is that some will focus on the messaging of quality more so than value and discounted offerings. Others that are really known for discounting and sort of food by the pound will probably have a much greater skew toward the value offering.”

In early February, Jack in the Box rolled out a new buttered split-top bun inspired by its popular Buttery Jack bun. The product launch was part of an initiative the QSR is calling “Declaration of Delicious,” which has the chain upgrading 29 menu items.

Comma said several of Jack in the Box’s major competitors are trying to win with value-type messages that are driving their performance. And while that strategy may make sense for those chains because of their scale, regional players like Jack in the Box aren’t going to win on a value strategy, Comma said.

“We’re going to have to win on somewhat of a quality-based strategy that’s getting us higher margin and higher average ticket,” he said. “And so you’ll see more of our messaging skewed toward that way.

“No matter how you play the game, though, everybody is in the QSR business, and the consumer does require a certain amount of value from all of us. So when you’re in an environment that involves this much discounting, we’re essentially just trading customers. And I don’t think that those are necessarily sustainable efforts, but they are environments that we have to be ready to respond to.”

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