"If you can shift people away from higher-food-cost items like steak to chicken, the margins can go up, and you hope to get people buying the meal more often so your sales go up," said Tammy Bailey, a Jack in the Box vice president.
Stung by previous price wars induced by soft economies, the chains have become much smarter about "engineering offerings that are still profitable," said Robert Derrington, an analyst at Morgan, Keegan & Co. in Nashville.
In December, McDonald's replaced the double cheeseburger on its $1 menu with the McDouble burger. The two sandwiches are essentially the same, with one exception: The McDouble has only one slice of cheese instead of two. The change saves restaurants 6 cents per sandwich, and "when you sell as many as we do, it adds up quickly," said McDonald's spokeswoman Danya Proud.
Even when chains aren't cutting back on ingredients, they are getting an economic break because of the rapid decline in the price of food commodities compared with a year ago, Derrington said. But eventually that will end, and restaurant prices will increase.
"Once commodities start to go up," Derrington said, "consumers won't be living in the world of great deals that they have today."
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jerry.hirsch@latimes.com
