Jack in the Box, America’s sixth-largest burger chain, is facing significant challenges, leading to the closure of numerous locations as soaring beef prices and rising customer dissatisfaction take their toll. With 2,168 restaurants primarily located in California, Arizona, and Texas, the 74-year-old chain has announced plans to shut down between 80 and 120 of its outlets by the end of the year to mitigate severe financial losses.
In an effort to turn things around, CEO Lance Tucker introduced the ‘Jack on Track’ strategy in April, which aims to close 150 to 200 underperforming locations from April 2025 to mid-2026. However, recent earnings reports suggest that the company has not made substantial progress toward these goals. As of November, Jack in the Box reportedly closed 12 locations in May and 13 in August, with an additional 47 closures noted in November, bringing the total to 72—still falling short of the year-end target with only a week left in the calendar year.
The fast-food chain, known for its Sourdough Jack burgers and all-day breakfast offerings, has encountered a decline in foot traffic, coupled with skyrocketing beef prices and an overwhelming debt burden nearly six times higher than its annual earnings. In a single quarter, Jack in the Box posted a net loss of $80.7 million. The company’s sales experienced a 7.4 percent drop compared to the same period last year, marking the second consecutive quarter of falling sales.
To address customer concerns regarding pricing, Jack in the Box has raised its advertising efforts, enlisting musical artist T-Pain to promote a ‘Munchie Meal.’ However, many customers feel that the perceived value has significantly declined, especially following changes to the loyalty program, which now provides one point for every $10 spent, rather than one point per dollar.
In response to consumer feedback, the chain is focusing on value meals, including a burger combo priced at $4.99 and a Smashed Jack sandwich for $5. While the company aims to attract price-sensitive customers, executives have also acknowledged the need to raise prices due to climbing costs from suppliers, which rose by 6.9 percent.
Adding to its struggles, Jack in the Box recently faced backlash from a costly acquisition of Del Taco. The company purchased the Mexican-inspired fast-food chain in 2022 for $585 million but sold it to a franchisee for just $115 million, resulting in a significant financial setback.
As Jack in the Box navigates these turbulent waters, analysts suggest that the chain is in ‘survival mode’ as it grapples with the consequences of prior price increases that worked well during the pandemic but may not resonate with today’s more cost-conscious consumers. Though the road ahead appears challenging, the company is taking steps to regain customer trust by enhancing its value offerings and addressing feedback regarding pricing.