McDonald’s confirms $5 value meals to lure back low-income customers after price hikes
McDonald’s confirmed that it will roll out a limited $5 combo meal this summer in hopes of enticing inflation-battered customers who have stayed away after the fast-food chain spiked prices.
The Chicago-based company said it will introduce a month-long promotion starting June 25 during which diners can choose from four items — either a McDouble or a McChicken sandwich, to go along with small fries, a small soft drink and a four-piece Chicken McNuggets — for just $5.
McDonald’s had come under fire after some locations were charging as much as $18 for a Big Mac meal and $7.29 for an Egg McMuffin.
McDonald’s, like its peers, has raised prices by mid- to high-single-digit percentages over the past year in response to a rise in costs of eggs and other raw items. It has also hiked prices in California, where the state imposed a $20-an-hour minimum wage for fast food workers.
A McDonald’s spokesperson told The Wall Street Journal that the $5 meals are part of a strategy to offer nationally advertised value deals.
“That’s been true since our very beginning and never more important than it is today,” the company said.
The Post has sought comment from McDonald’s.
Last week, Bloomberg News reported that McDonald’s was considering a $5 value meal.
Global restaurant chains such as McDonald’s and Starbucks have seen lower-income customers opting to eat more meals at home amid a cost-of-living crisis, forcing the companies to offer steeper promotions to attract them to their outlets.
Some McDonald’s customers reported that locations were no longer offering free refills.
McDonald’s, which has a higher exposure to the lower-income diners, reported last month that its global sales growth slowed for the fourth straight quarter.
“I think it’s important to recognize that all income cohorts are seeking value,” CEO Chris Kempczinski said on a post-earnings call.
Shares of McDonald’s rose 0.8% as of noon on Wednesday.
McDonald’s missed quarterly profit estimates for the first time in two years as budget-conscious consumers looked past its offers and the Middle East conflict weighed on the burger chain’s international sales.
Global comparable sales growth slid for the fourth straight quarter to 1.9%, with the company saying consumers turned “more discriminating with every dollar they spend.”
Analysts had estimated a 2.35% rise, according to LSEG data.
“Consumer is certainly being very discriminating in how they spend their dollar … I think it’s important to recognize that all income cohorts are seeking value,” McDonald’s CEO Chris Kempczinski said on a post-earnings call.
McDonald’s results were in contrast to those from other fast food chains that have also leaned on value menu items to lure customers who are making fewer restaurant trips.
“We have seen that our relative superiority on affordability has declined in some markets,” Kempczinski added.
Burger King-owner Restaurant Brands International beat expectations for quarterly results, while Domino’s Pizza benefited from offers on pizzas.
McDonald’s first-quarter same-store sales grew 2.5% in the United States, sharply lower than a 12.6% growth last year and slightly below estimates of a 2.55% growth.
Comparable sales from the company’s international licensees, which made up 10% of its overall revenue in 2023, declined 0.2%, offsetting positive trends from Japan, Latin America and Europe.
Analysts had expected a 0.98% rise for the unit.
With Post Wires
