Taco Bell has introduced a $7 value meal called the Luxe Cravings Box, available for a limited time. The move is seen as a way to attract more customers, as some have moved away from fast food amid inflationary pressures.

Yahoo Finance reporter Brooke DiPalma joins Morning Brief to break down Taco Bell's push for value and how the fast food sector will play out as other brands attempt similar tactics.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Nicholas Jacobino.

Video Transcript

Taco Bell is rolling out a $7 value meal for a limited time.

This after a slew of other fast food chains start offering cheaper options in a bid to lure customers back to discuss how investors are feeling about the value meals.

We've got Yahoo Finance's very own.

Brooke Dipalma here.

Ok.

Break down the $7 value meal for us here.

What's going on at Taco Bell?

How does it compare to the rest?

Yeah.

So they're calling this the Lux meal.

And that's ultimately because the fact that consumers right now are thinking that fast food is luxury.

And so they're playing into that with this luxe menu box and ultimately, the $7 price tag, the company says that that's actually a 55% discount if you got each item separately.

So you get it in this box.

And ultimately, it includes a slew of a slew of different items.

It includes a chalupa supreme, a beefy five layer burrito, a double stack taco chips and nacho cheese sauce as well as a medium drink, but largely what they're doing here, what many on the street will be watching to see if this works throughout July and not just for Taco Bell, but all of the companies that have recently introduced their take on a value menu item.

We've seen mcdonald's, we've seen Burger King, we've seen KFC, we've seen even Starbucks playing into this and many analysts on the street saying that July will be a pivotal month to see if this strategy works and there are three ways to identify who will win this price competition.

Analysts want to see an increase in foot traffic, wanna see more customers in the store while these limited time offerings are being promoted.

They also wanna see consumers adding more beyond just the value meal.

They wanna see those premium attachments, they wanna see consumers adding more to their ticket.

In addition to that, they wanna see a frequency in visits.

They wanna see consumers come back for this value menu items in addition to other things, but they also want to see consumers come back after and this is largely in a bid to try to change the perception that fast food is too expensive right now.

So yes, these value menus are here for a limited time but they want to see consumers come back after they're done as well.

You know, it's interesting, I'm looking at some data from comparably on the Taco Bell NPS, the net promoter score, the amount of people that would be likely to recommend your brand.

Uh and they've got a negative 13 right now and it's been slipping since this point of last year here, who is best positioned to win the pricing war, knowing that all of them are going up against whether or not customers would recommend your value meal versus other and be likely to be repeat customers.

Right.

So I was at Taco about headquarters last week in, in Irvine, California and really the CMO there and other executives are really hoping to hit the nail on the head, really get consumers in by saying yes, this is $7 versus what others are doing at $5.

But we're giving an abundance of a meal.

We're giving many different items in their $7 box and they're really hoping that that lures in competition.

They also recently introduced a cheez it collaboration.

We're also hoping that LS in competition as well.

But what Wall Street is really looking for here is who does the best marketing, who does the best advertisements in order to get consumers in the door and who communicates that they think that their value is best first the competition, the CMO at Taco.

Well, actually telling me that he thinks others aren't providing a hearty meal for what they're offering with these value menu items.

All about the value wars.

Now, we'll see who comes out of the one.

All right, Brooke, thanks so much.