Starting June 25, McDonald’s (NYSE:MCD) will introduce a $5 meal deal for a limited time at select U.S. locations. This move is part of a broader strategy by fast-food chains to offer cost-effective options and attract lower-income customers amid rising living costs.
Competing Deals from Burger King
Burger King, owned by Restaurant Brands International, is also considering a $5 “Your Way deal.” Fast-food companies are enhancing their deals and promotions to appeal to inflation-hit consumers who are increasingly choosing to eat at home.
Details of McDonald’s Value Deal
McDonald’s $5 meal deal will include:
A McDouble or McChicken sandwich
Small fries
Four-piece Chicken McNuggets
Small soft drink
In some locations, such as Alaska, California, Guam, Hawaii, Nevada, New York (Manhattan only), and Washington, the McDouble meal options may be priced at $6.
Additional Promotions
McDonald’s has also reintroduced the app-only “Free Fries Friday” promotion, offering customers a free medium fry with any $1 minimum purchase through the end of 2024.
Impact of Picky Spending and Promotions
Selective spending has impacted performance at both McDonald’s and KFC parent Yum Brands in recent quarters. In contrast, promotions have driven sales at Domino’s Pizza.
Economic Pressures on Lower-Income Groups
Disposable income among lower-income groups in the U.S. is decreasing, while menu prices across the food industry have risen over the past year due to higher commodity and supply chain costs.
Addressing Misconceptions and Home Eating Trends
In late May, McDonald’s USA President Joe Erlinger publicly addressed viral reports of runaway Big Mac prices, calling them inaccurate. Meanwhile, the trend of eating at home has been accelerated by major retailers like Target, Walmart, and Kroger, which have kept prices on everyday essentials low.
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