The New Price Perception Game
As price sensitivity increases across the U.S., brands must rethink how they structure value propositions. Tiered pricing menus like the $1 $2 $3 model are under scrutiny—not for offering choice, but for replacing simpler, trusted price points. Done well, these menus can deepen loyalty. Done poorly, they signal opportunism.
What the Data Says
- 52% of consumers say they choose restaurants based on lower prices in Q1 2024. Nation's Restaurant News
- 55% of customers would eat out less frequently if prices continue to rise. Nation's Restaurant News
- 81% of consumers compare prices before an important purchase. WARC
What Shoppers Told Us
“What happened to the just one dollar menu? I want to know why they implemented this. I guess it's alright, but it's stupid. Why would you do that? You already had everything for a dollar. Now, you're increasing the prices. Like, oh, it's a $1 $2 $3. That's stupid. Keep it at $1. Why am I paying an extra $1, $2 for stuff that was already a dollar? They're making it like this is a brand new thing. I'm like, no, you just want more money.”
Why this quote matters: Sarah’s frustration illustrates the emotional impact of perceived price inflation. It highlights how legacy pricing anchors shape loyalty—and how changes must be handled transparently.
Recommendations for Brands
- Preserve legacy anchors: Keep one $1 item to maintain psychological trust and nostalgia even as the rest of the menu shifts.
- Frame clearly: Position $2 and $3 items as added value, not hidden inflation. Use signage and menu design to communicate the difference.
- Test regionally: Use local A/B testing to compare how value menu tiers impact perception and repeat visits.
- Listen to feedback: Actively incorporate consumer sentiment from online reviews and social media into pricing strategy adjustments.
- Build around loyalty: Pair tiered menus with rewards programs that offer free items after consistent spending to buffer inflation concerns.