Taco Bell is reportedly spending at least $10 million to get customers to try its breakfast on Thursday.
The chain is giving away free A.M. crunchwraps between 7 a.m. and 11 a.m. after losing a Major League Baseball World Series bet.
Giving away the $2.50 breakfast sandwiches for free will cost Taco Bell at least $2 million to start, according to a Bloomberg estimate that assumes the 6,000 Taco Bell restaurants participating in the deal will hand out two crunchwraps a minute.
The sandwiches cost Taco Bell about 68 cents to make, Bloomberg reports.
Add to that the cost of advertising the promotion on TV — which likely totals $2 million to $3 million — and expenses related to the chain’s ongoing promotional deal with Major League Baseball (between $10 million and $15 million) and it looks like Taco Bell is spending upwards of $10 million to give people free food, according to Bloomberg.
That’s a pretty costly way to drive traffic to your restaurants. We reached out to Taco Bell for comment on whether the estimates are accurate and we’ll update when we hear back.
Taco Bell is probably hoping that customers buy other items, like sides or drinks, when they pick up their free crunchwraps on Thursday.
But the main reason for the promotion is to generate buzz around its breakfast offerings and to get people to actually try the morning menu, which launched in March of last year.
The chain’s crunchwraps consist of bacon or sausage, scrambled eggs, shredded cheese, crispy hash browns, and creamy chipotle sauce inside a grilled tortilla.
Breakfast accounts for roughly 6% of Taco Bell’s sales. Rival McDonald’s, which has the biggest share of the fast-food breakfast market, gets about 25% of its business from breakfast sales, by comparison.
Taco Bell made the promise of free crunchwraps last month. The chain said if a base was stolen during the first or second game of the series, then it would give away the free food.
Kansas City Royals player Lorenzo Cain did just that in the first game on October 27. Cain stole second base during the sixth inning of the game against the New York Mets.
Article Appeared @http://finance.yahoo.com/news/taco-bell-spending-more-10-165055901.html