How to Fight a Chicken Wrap War

The first chicken sandwich war started with Chick-fil-A, spread to Popeyes, and then to KFC and Wendy’s.

It all began when Chick-fil-A moved to New York City in 2015. Then, several years later, Popeyes offered an extra crispy version with an unusually thick pickle slice. Next, KFC added a Cheetos chicken sandwich and Wendy’s, a loaded Nacho chicken sandwich:

Now the same sellers are waging a wraps war.

The Chicken Wrap War

After McDonald’s relaunched its McCrispy Snack Wrap on July 10th, Popeyes offered a “free” chicken wrap with every $5.00 purchase. Reflecting weight loss drug takers’ quest for smaller portions, the wraps’ size is diminished. And, at $4.00 or so (for most), sellers’ price points recognize consumers’ concern with pricey fast food. Also, they know we are snacking more.

Meanwhile, Taco Bell reminded us that it had a limited time crispy chicken taco and burrito offer that began 24 days before the McDonald’s announcement. And, soon after, Sonic entered the fray with its Crispy Tender wraps. Then, hoping also to increase its market share, Arby’s has a BBQ chicken wrap, Wendy’s, a Grilled Chicken Wrap, Chick-fil-A’s Cool Wrap, and Burger King, something they call Fiery Royal Crisp Wrap.

Our Bottom Line: Monopolistic Competition

In a monopolistically competitive market, it makes sense to select catchy names, low prices, and limited time offers. Telling us what is special about their wrap is precisely how McDonald’s and its competitors try to differentiate their chicken wraps from everyone else’s.

Monopolistic competition is composed of two halves. The monopoly part indicates the company is producing something unique that you associate solely with it. But the competition half says that lots of others have something that could be identical or very similar. A beauty salon is the perfect example. You can get a haircut at many hundreds of shops. But the one person who does your hair is what makes the place unique.

In the four basic market structures, monopolistic competition is located to the left on the scale. Its position indicates less price and non-price power than those firms located to right. For monopolistic competition, businesses tend to be smaller and the market is their boss:

Because all chicken wrap snacks are similar and yet different, each fast food chain is trying to distinguish its version from all the others.

My sources and more: Thanks to The Washington Post, the NY Post, and Business Insider for alerting me to the wraps war. Similarly, several years ago, econlife looked at a chicken sandwich war.

Please note that several of today’s sentences are from a past econlife post and our featured image is from The Washington Post.