Taco Bell's new menu goes for a cheap fill

— -- Taco Bell may be emerging from taco hell.

It hasn't been easy. There was the E. coli outbreak in late 2006 that sickened 70 and closed dozens of restaurants. Then, the rat infestation at a New York City unit in 2007 that became an Internet must-see.

Wednesday, the image-challenged chain — which has slowly but methodically regained its footing — will detail a 2008 product game plan that could nudge folks to forget the past and instead drive into Taco Bell in droves: cheap eats.

We're talking really cheap.

The same chain that turned the fast-food industry on its head back in 1990 when it introduced cut-rate, 59-cent, 69-cent and 79-cent menu items is about to do it again. Taco Bell on Thursday is rolling out its "Why Pay More?" value menu with 10 products — four of them new — priced at 79 cents, 89 cents and 99 cents.

For Taco Bell, the timing could hardly be better. The battered economy has sent much of the $558 billion restaurant industry tanking. After staying above the fray for months, the fast-food industry finally succumbed in March, when sales at units open at least one year dipped about 0.5% compared with the same period in 2007, reports research firm Technomic. Taco Bell's move also comes just ahead of the frantic summer season, when fast food bags more sales than any other time of year.

There's never been a better time to brag — and to brag loudest — about selling cheap grub. McDonald's is hyping $1 Double Cheeseburgers in some markets. KFC is hawking 99-cent Snackers. Subway and Quiznos are waving $5 foot-long subs.

"The tough economy plays to Taco Bell's strengths like no one else's," says Dennis Lombardi, a restaurant industry consultant. "This gives them something to shout about."

It might force the rest of the fast-food industry to take a second look at their own value items. But it will be extremely difficult for burger-heavy McDonald's and Burger King to match cheese-heavy Taco Bell.

Marketing blitz

The chain's image of cheap eats will be all over the tube as it unleashes TV spots this weekend that feature folks hunting for loose change — under couches, inside car cup holders and in their pockets — to pay for food at Taco Bell.

"This taps into the fundamental problem that many families are facing: Do I put gas in the car or feed the family?" says Greg Creed, Taco Bell's president, in his first extensive interview with a national publication since he took over nearly 18 months ago. With Taco Bell's new value program, he says, families can afford both.