Perkins: How Long Can They Last in a Price War?

In the ever-evolving landscape of American dining, value is king. Perkins American Food Co, with its rebrand from Perkins Restaurant & Bakery®, is making a bold move in the ongoing price war with the introduction of its Great American Trio. However, according to Steven Johnson the Grocerant Guru® at Tacoma, WA based Foodservice Solutions® the real question remains: how long can Perkins sustain this strategy amidst fierce competition?

The Great American Trio: A Strategic Play

Perkins’ latest offering, launching on July 19, is positioned as "America’s best value breakfast." The Great American Trio features three budget-friendly breakfast options:

• 5 Under $5: Two buttermilk pancakes, two Applewood smoked bacon strips, and one egg at $4.99.
• 6 Under $6: Two buttermilk pancakes, two Applewood smoked bacon strips, and two eggs at $5.99.
• 7 Under $7: Three buttermilk pancakes, two Applewood smoked bacon strips, and two eggs at $6.99.

Toni Ronayne, President of Perkins American Food Co., emphasizes the brand’s 65-year tradition of delivering value and quality. This move is a clear attempt to capture budget-conscious diners who are increasingly seeking affordable yet satisfying meal options.

A Historical Perspective on Price Wars

Price wars are not new to the restaurant industry. Historically, these battles have reshaped the competitive landscape, driving some players to innovate while others falter. Let's look at some notable examples:

1. Burger Wars of the 1980s: McDonald’s, Burger King, and Wendy’s engaged in aggressive price-cutting and promotions. While McDonald’s emerged stronger, others struggled to maintain profit margins, leading to closures and re-strategizing.
2. Dollar Menu Decades: In the early 2000s, the introduction of dollar menus by fast-food giants forced many to follow suit. This strategy drew in value-seeking customers but squeezed profit margins, pushing brands to find a balance between value and profitability.
3. Breakfast Battles: In recent years, chains like McDonald’s and Taco Bell have fought fiercely over the breakfast crowd, introducing value menus and breakfast-specific promotions. This has intensified competition and forced others to innovate or risk being left behind.

Perkins’ Current Strategy

With the Great American Trio, Perkins is banking on its ability to deliver consistent value while maintaining quality—a challenging feat. Diana Garcia-Lorenzana, Vice President of Marketing, highlights that today’s families are more price-sensitive than ever. The new trio of offerings aims to address this need directly.

Building a Larger Share of Stomach

Requires More than PRICE

Sustainability in a Price War

The key to surviving a price war lies in maintaining operational efficiency and customer loyalty. Perkins’ strategy of serving breakfast all day, combined with the perceived value of its offerings, positions it well in the short term. However, the long-term sustainability will depend on several factors:

• Operational Efficiency: Keeping costs low while delivering quality is paramount. This includes managing supply chains, optimizing staffing, and leveraging technology for better service.
• Customer Loyalty: Creating a loyal customer base that values the brand beyond just the price. This can be achieved through exceptional service, consistent quality, and targeted marketing efforts.
• Innovation: Continuously evolving the menu and dining experience to stay ahead of competitors. This includes introducing new items, enhancing the dining atmosphere, and adopting new technologies.

Think About This

Perkins’ Great American Trio is a compelling play in the ongoing price war. The brand's commitment to value and quality, rooted in its 65-year history, gives it a strong foundation. However, the challenges of sustaining such aggressive pricing strategies are real. As history has shown, the winners in price wars are those who can innovate, maintain operational efficiency, and build lasting customer loyalty. Perkins is off to a strong start, but only time will tell if they can endure the pressures of the battlefield. For now, diners can enjoy America’s best value breakfast, all day, every day.

Fun Fact

Did you know that Perkins serves more than 150 million pancakes annually? That’s enough to create a pancake trail from New York to Los Angeles and back! Now, with the Great American Trio, that number is bound to rise as more customers flock to Perkins for their unbeatable breakfast deals.

Invite Foodservice Solutions® to complete a Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869