Taco Bell enters fast food wars with new value meal deal: What it costs and what you'll get

Luxe Cravings Box launched just after McDonald's released its own value meal deal

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Americans grapple with fast food inflation as 78% now view it as a luxury

California restaurant owner Scott Rodrick discusses the impact of inflation, labor costs and other challenges for the fast food industry on 'Maria Bartiromo's Wall Street.'

Taco Bell is the latest fast-food chain to jump into the value meals war, aiming to take a bite out of the competition and woo back customers who reined in spending due to higher prices.

Dubbed the Luxe Cravings Box, for $7, customers can get a Chalupa Supreme, Beefy 5-Layer Burrito, Double Stacked Taco, chips and nacho cheese sauce, and a medium drink for a limited time.

The deal, which the company said is a 55% discount off suggested menu prices, comes just after Burger King, Wendy's and McDonald's launched their own meal deals.

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Fast food companies are going head-to-head and offering nearly identical promotions to lure back customers who've been hesitant to return given the higher menu prices.

The Taco Bell logo and a burrito can be seen outside a branch of the chain in London.  (Julia Kilian/picture alliance via Getty Images / Getty Images)

About three in four Americans typically eat fast food at least once a week. However, 62% of them say they’re eating it less due to rising prices, according to a recent LendingTree survey. Nearly 80% now view fast food as a luxury because of how expensive it has become, the data showed.

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Executives industrywide have acknowledged that prices have gone up in recent years due to the increased costs of operations. In an open letter to customers last month, McDonald's USA President Joe Erlinger said the average cost for menu items has surged 40% over the last five years. This increase reflects the uptick in the cost of goods as well as a rise in workers' salaries.

A McDonald's fast food restaurant is seen in Belmont, United States on April 03, 2023.  (Tayfun Coskun/Anadolu Agency via Getty Images / Getty Images)

In May, McDonald's CEO Chris Kempczinski told analysts during the company's first-quarter earnings call that "across almost all major markets, industry traffic is slowing."

"In the context of a difficult macro environment for the industry, we know our customers are looking for reliable everyday value now more than ever," Kempczinski said.

That same month, Wendy's Chief Financial Officer Gunther Plosch also told analysts that the "consumer is still under pressure."

In April, Joshua Kobza, CEO of Burger King parent Restaurant Brands International, noted that traffic at Burger King U.S. was flat during the three months ending on March 31. However, Kobza said that its "sales and traffic performance relative to competition is pretty good."