Jack in the Box Removes Toys From Kids' Meals

SAN DIEGO ( TheStreet) -- Jack in the Box ( JACK) removed the toys it offered with its kids' meals as the fast food sector continues to face pressure about using toys to market food to children.

The move garnered praise from consumer advocates who criticize fast-food companies for luring children to eat unhealthy foods through the doling out of toys and trinkets, contributing to the nation's growing obesity problem.

McDonald's ( MCD) recently faced a class action lawsuit over the use of toys in its famous Happy Meals, to which an executive for McDonald's New York region, Mason Smott, responded by arguing that "taking away toys from kids' meals won't solve childhood obesity."


Because of the popularity of its Happy Meals, McDonald's is one of the top toy distributors in the world. McDonald's is not alone in enjoying the success of kids' meals; chains including Wendy's Arby's ( WEN), Sonic ( SONC), Yum! Brands' ( YUM) Taco Bell and Burger King, among others, also offer free toys in their kids' meals.

Fast-food kids' meals toys have been called into question lately after a New York City councilman, following in the footsteps of a measure adopted in San Francisco and California's Santa Clara County last year, proposed that free toys be banned from fast-food meals intended to appeal to children unless the meals meet certain healthfulness guidelines. (Even McDonald's time-honored icon Ronald McDonald was called on to retire for the clown's peddling of fatty foods to kids.)


For Jack in the Box, its Los Angeles stores stopped offering toys with kids' meals as of Thursday.

McDonald's Smott argued that the Golden Arches' "Happy Meals make it easier for families to choose the right foods in portions just for kids," adding that "we provide options for our customers and trust them to make the decisions that are right for their families. Politicians should, too."

Jack in The Box

Jack in the Box spokesman Brian Luscomb said that "while we've been aware of efforts to ban the inclusion of toys in kids' meals, that did not drive our decision."

"Our advertising and promotions have focused exclusively on the frequent fast-food customer, not children," added Randy Carmical, also a Jack in the Box spokesman.


Luscomb conceded that a small percentage of Jack in the Box's $2.9 billion in annual revenue came from the sale of kids' meals, a menu item the chain has offered for decades.

Carmical added that Jack in the Box chose to focus more on the food its children's meals, rather than the toys; it recently began offering customers the option to substitute a portion of sliced apples with a caramel dipping sauce instead of French fries.

"We believe that providing these kinds of options is more appealing to a parent than packaging a toy with lower-quality fare," Carmical said.

Fast-food companies spend more than half of their marketing dollars on toy giveaways, with about $360 million spent each year on the toys, according to Margo Wootan, nutrition policy director at the Center for Science in the Public Interest.

The CSPI hopes other fast-food operators will follow Jack in the Box's example.

"We hope that McDonald's, Burger King, Wendy's, and Taco Bell are paying attention to Jack in the Box, which has decided to stop using toys to market fast-food meals to children," a CSPI statement said. "It's too bad that McDonald's, Burger King, Wendy's, and Taco Bell think they can't compete on the basis of quality, value, taste, or nutrition, but instead must resort to such a discredited marketing tactic to lure families to their businesses."

Jack in the Box shares were 1.6% higher at $22.47 ahead of the closing bell on Wednesday.

-- Written by Miriam Marcus Reimer in New York.

>To contact the writer of this article, click here: Miriam Reimer.

>To follow the writer on Twitter, go to http://twitter.com/miriamsmarket.

>To submit a news tip, send an email to: tips@thestreet.com.

READERS ALSO LIKE:




>>See our new stock quote page.

Get more stock ideas and investing advice on our sister site, Stockpickr.com.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

More from Stocks

12 Stocks That Make Up the GLUM Index

12 Stocks That Make Up the GLUM Index

REPLAY: Jim Cramer on Tariff Worries, Oil, Alphabet and Centene

REPLAY: Jim Cramer on Tariff Worries, Oil, Alphabet and Centene

Worth a Stunning $6.6 Trillion, Tech Stocks Have Taken Over the Market

Worth a Stunning $6.6 Trillion, Tech Stocks Have Taken Over the Market

Video: Athens Stock Exchange CEO on What's Next for Greece's Debt Woes

Video: Athens Stock Exchange CEO on What's Next for Greece's Debt Woes

Here's Why Snap Shares Climbed Monday

Here's Why Snap Shares Climbed Monday