Can a $5 lunch give Dairy Queen some heft?

The ice cream chain is introducing a permanent low-cost lunch menu, aiming to 'steal share' from much bigger rivals.

By Aimee Picchi Mar 25, 2013 11:52AM

The Dairy Queen logo on a store front in Arlington, Virginia (© SHAWN THEW/epa/Corbis)Dairy Queen is synonymous with summer treats, from soft-serve ice cream to Blizzard frozen desserts. 

But the 73-year-old company -- which is owned by Warren Buffett's Berkshire Hathaway (BRK.B) -- wants to lure customers with a "5 Buck Lunch," which it thinks will help it "steal share" from other quick-service restaurants, marketing chief Barry Westrum told Nation's Restaurant News

The chain started developing the idea last summer and offered a limited-time offer in the fall. The permanent rollout will offer a $5 menu between 11 a.m. to 4 p.m. and provide the choice of a Grillburger with cheese, chicken strips or a chili cheese dog, as well as medium fries, a medium soda and a soft-serve sundae. 

Why make the $5 menu a standing offer? Many consumers are still feeling pinched, giving Dairy Queen an opportunity to lure diners away from competitors, Westrum said. 

"Even though some might say the recession has improved, the fact is that these improvements just aren’t coming fast enough for consumers," he said. Competitors, which Westrum didn't name, "constantly bewilder consumers with inconsistent value offers," he noted. 

Dairy Queen has a long way to go to get to the top of the quick-service industry, however. Based on revenue, it ranked as the 16th-largest fast-food chain in 2011, trailing bigger restaurants such as No. 1 McDonald's (MCD) and Subway, the runner-up, according to QSR magazine

But with consumers hit with a payroll tax hike this year and as a result shunning pricier sit-down eateries such as Darden Restaurants' (DRI) Red Lobster and Olive Garden, DQ's low-cost lunch might hit the spot. 

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Mar 25, 2013 1:52PM
I tried DQ food based on the $5 meal, after previously only going there for ice cream, and was VERY pleasantly surprised!  The burger was so much better tasting than any burger at the other fast food chain places.  It's like one you might make at home and doesn't have that assembly line taste.  I have also tried the chicken strips and gravy and wowee, that is so good.  We are choosing to go to DQ now when we're hungry for burgers. 
Mar 25, 2013 1:50PM
Dairy Queen has great food plus many special ice cream options. I am surprised they are not stealing market share with  this advantage.
Mar 25, 2013 1:49PM
I will vote with my feet   See ya at Diary Queen
Mar 25, 2013 2:20PM
I wish there was a DQ a little closer to my house, I would go!! LOVE DQ
Mar 25, 2013 3:40PM
For burgers and other fast food, I have always considered DQ quality and prices, second only to our Texas based Whataburger. Last year a survey in Texas listed  Whataburger as first choice for Texans and DQ as second, both way ahead of McDonalds, Burger King and Wendy's..
I've enjoyed DQ for years. I love the chicken stripes, my husband is a hot dog lover.  Then for dessert I get a small dipped soft serve.  Wish we had one in our town.  Have to go about 15 miles if we want DQ.
Mar 25, 2013 3:36PM
When I lived in Kansas, there was a full-service (meaning food) Dairy Queen by my house.  The food was incredible.  The burger wasn't greasy and the lettuce/tomato were fresh.  I wish there were more in TX.
Mar 25, 2013 3:55PM
DQ does have decent burgers and fries----so i think it is a good idea!!!!!!!!!!!!
Mar 25, 2013 4:19PM
Mar 25, 2013 5:02PM
I like DQ and have been going there for years.  I also realize that DQ is a franchise, and when one store is sold things change.  My closest DQ was recently sold to a new owner.  This new owner isn't of American descent, I'll not disclose his nationality because I don't want to be called a racist.  We immediately noticed that cleanliness went downhill, as did portion size and toppings while prices were raised.  I once asked for and received a strawberry shortcake, I watched this new owner yell abusively at the gilr preparing it and he took away the can of whipped topping to show her how much to put on, and it was a scant teaspoon amount.  Thank Goodness that someone decided to open a DQ Grill in the opposite direction, and what a direction.  The food is good  it's clean and the toppings on ice creams don't look like they ran through on stilts.  So, overall DQ is good, I like the idea of a $5 lunch when I'm on the "go" I think what is most important is to remember that each DQ is operated by an independent franchisee.
Mar 25, 2013 5:03PM

FYI in western NE our Dairy Queen has better quality food than applebees love it


Mar 25, 2013 4:22PM
I used to work at DQ for many years. During that time we had what was called an Full Meal Deal, where you got a sandwich, fries, soda and a sundae... We used to sale tons, and then DQ said nah we want to do away with it and not offer the ice cream and charge a little more. People bulk at that, and sales go down. We all know it doesn't cost $4.00 to make that burger. I can remember when an ice-cream cone was under a dollar, now a kiddy cone (baby cone) is $2.00 just crazy. I wish DQ luck, I agree they have some of the best food out there.
Mar 25, 2013 3:58PM
part of the appeal and charm of DQ is it's family style Restaurant, it's not designed to seat hundreds of people in short periods of time, and if it did it would just be another McD's with more stupid employees playing forty questions with the customers.
Mar 25, 2013 4:23PM
Mar 25, 2013 4:30PM
DQ's Maid-Rite sandwiches are the best! 
Mar 25, 2013 4:14PM
Always loved DQ the best and then they took all of ours away! Have to make a long drive just to go, but sometimes it's worth it. We sub Whataburger or Burger King for DQ until we get a chance to "travel" there.
Mar 25, 2013 5:48PM
I'm glad to hear this! The DQ here is very good -- their food is always fresh and hot. Also, I know one of the servers, and she always gives me a bigger soda when she waits on me. Just had some tacos from there for lunch today, and they were really good!!!!
I like the idea of a varied menu in that price range.  I don't eat out too often, but if I do, like the idea of a nice variety like this.  I love a sundae made with their chocolate soft serve, peanut butter sauce and hot fudge on it.  YUMMO!  Now Iam going to want to go to DQ tomorrow :) ! 
Mar 25, 2013 6:33PM
I live in Hagerstown,Md. the DQ on the DualHighway only sells ice cream. I have had the burger and it is great. This DQ needs to put a grill in this location.
Mar 25, 2013 3:40PM
I love DQ but they seem to be lagging behind horrendously in new products as well as advertising for their products.  They did have a stint here and there with advertisement but it's hit or miss for them and seems to be more miss.  Such a shame.
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