New Offensives Launched in the Burger Wars : Fast food: McDonald’s will cut prices of 9 basic items at Southland outlets. Rival Taco Bell, which earlier adopted a similar price strategy, has agreed to buy a hamburger chain.

Sizzling news from the burger world this week.

McDonald’s Corp. said Thursday that it will cut prices on nine basic menu items at its Southern California restaurants, a strategy similar to one begun recently by rival Taco Bell.

The announcement comes on the heels of news that reigning Mexican fast-food king Taco Bell has agreed to buy a Michigan burger chain for an undisclosed amount. Analysts are speculating that the move could signal parent company PepsiCo Inc.’s entry into the burger wars.

McDonald’s, facing competition from rivals and a recession, will discount such items as its new breakfast burrito (59 cents) and Happy Meals ($1.99)--while leaving unchanged the prices of its Big Mac and Quarter Pounder standards.

“These are difficult economic times, and the reintroduction of our basic menu items through our value menu enables us to reinforce this quality and value with our customer,” said Yvette Franco, McDonald’s regional marketing manager.

McDonald’s said the price cuts, which go into effect Dec. 28, will trim 5 cents to 20 cents off the cost of some items. The items will be priced from 59 cents to $1.29. But because 75% of McDonald’s restaurants are independently owned, prices may vary from location to location.

In late October, Irvine-based Taco Bell said it had grouped certain menu items into three categories, priced at 59 cents, 79 cents and 99 cents.

“They’re responding to Taco Bell’s pricing strategy,” said Janet Lowder, president of Restaurant Management Group, a San Pedro consulting firm.

But Franco said McDonald’s is responding more to the economic situation than the actions of competitors. She said each of McDonald’s different regions will decide independently whether to implement the discount program. The Oak Brook, Ill.-based company’s region in Denver has already begun the program.

McDonald’s said it will promote the discount menu with the slogan “Low Down Menu at McDonald’s,” and will have a copy of the menu on the floor in front of the cash registers. “This literal emphasis of looking down for the reduced prices of value menu items will be complemented by additional (signs) both inside and outside of the restaurants,” McDonald’s said.

On Wednesday, Taco Bell said it has agreed to purchase Hot ‘n Now, a 77-store burger chain based in Kalamazoo, Mich. Financial details of the pending sale were not announced, but the trade publication Nation’s Restaurant News reported that Hot ‘n Now owner William Van Domelen would receive PepsiCo stock valued at between $15 million and $20 million for 22 company stores and certain franchising rights.

Hot ‘n Now restaurants have no inside seating, just a walk-up or drive-through window on two sides. A quarter of the size of a typical McDonald’s, the restaurants are just large enough for the kitchen, crew and storage space.

Taco Bell officials downplayed analysts’ speculation that the purchase of Hot ‘n Now signals PepsiCo’s entry into the burger market.

“There is all kind of speculation as to what this means,” said Elliott Bloom, a Taco Bell spokesman. “Taco Bell is a wholly owned subsidiary (of PepsiCo.), but we operate very much autonomously. The reason we made the acquisition is purely an operational one; it enables us to take a look at the double drive-thru concept.”

Lowder agreed that PepsiCo is probably not moving into burger sales. PepsiCo supplies soft drinks to some burger chains, such as In ‘n Out Burger. These chains, she said, “wouldn’t like to know that their supplier is also their competitor.”

Bloom said Taco Bell and Hot ‘n Now both emphasize low prices and quick service. “It’s a very tight fit with our strategy,” he said.

He said the Hot ‘n Now outlets have annual gross sales of about $700,000 per store, “and I’d call that a pretty successful operation.”