Buffalo Wild Wings' New Pricing Strategy Could Backfire
Gerald Angeles/Flickr Buffalo Wild Wings' plan to combat higher chicken wing costs could backfire, according to Morgan Stanley.
The chain could experience " adverse consumer reaction to new portion sizing," a recent note said.
Buffalo Wild Wings began charging by volume rather than quantity last year.
In other words, the restaurant would sell five larger wings for the same price as six smaller wings had been.
"People would see a five, 10, 15 [or] 20 count as compared to the 6, 12, 18, 24" plan that was previously in place, the company told Restaurant Business magazine last year.
Morgan Stanley warns that traffic could suffer if chicken wing prices fall but Buffalo Wild Wings keeps the current pricing strategy in place.
Morgan Stanley Prices for the snack have been volatile in recent years.
CEO Sally Smith said that although the chain was selling platters with fewer wings, the individual pieces were bigger, so customers were getting the same value.
Prices for the gameday snack have been volatile for two years because demand for wings is greater than it is for other chicken parts.
The cost of wings has declined since 2013, but remains unstable, according to Morgan Stanley.
The sports bar chain has enjoyed explosive sales growth this year.
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