McDonald’s diners haven’t been shy about voicing their feelings about the burger giant’s price hike to $8 for a chicken sandwich and $18 for a Big Mac meal — a phenomenon they’re reluctant to call To be “McFlation.”
“It’s $25.39 for a 40-count nuggets and two large fries. You can’t even throw a Sprite in? one TikToker grumbled.
Now, the fast food giant is avoiding selling more beef to its customers and planning to introduce a $5 meal deal to US customers for a limited time, Bloomberg reported. The meal package may include a McChicken or McDouble, fries, and a drink—similar to the chain’s similar promotions in other countries, such as Germany. McSmart Menu. Coca-Cola is expected to contribute capital to the fast food chain to offset potential profit losses.
McDonald’s USA said Luck that the company consistently offers similar meal deals, with 90% of franchisees selling meal plans for $4 or less. The company declined to comment on the potential $5 meal deal.
The move would fulfill CEO Chris Kempczinski’s promise to increase cost-saving menu items after McDonald’s. Missed expectations of making money for the first time in nearly four years in the fourth quarter of 2023, partly due to price increases. Kempczinski admits that consumers earning less than $45,000 per year—once McDonald’s core customers—no longer dine at the burger chain, opting to cook at home thanks to Reduce grocery store inflation.
“I think what you’re going to see going into 2024 is probably more attention to what I would describe as affordability,” Kempczinski told analysts in February. “The battleground is definitely with low-income consumers.”
McDonald’s Weak sales in the first quarter of 2024 reiterated the need to promote affordability. While the company continues to be affected by boycotts related to the ongoing conflict in Israel and Gaza, McDonald’s also said that comparable sales growth of 1.9%, just missed . Bloombergof expectations, so that low-income customers pull back. Kempczinski further suggested savings menu deals, calling online promotions effective but “very sporadic.”
Franchisor skepticism
Despite customer demand for cheaper food, the new $5 meal deal isn’t everyone’s favorite. Bloomberg reported that some franchisees were worried about the company losing money during the promotion. Some restaurant operators who participate in McDonald’s marketing campaigns did not approve of the $5 meal deal initiative earlier this year. Instead, an independent franchisee has pushed to reintroduce products like snack wrappers that, in addition to being more affordable, are also easier to produce.
In states like California—recently increase the minimum wage for fast food workers up to $20—franchises have repeatedly warned customers about raising prices to offset rising labor costs and inflation. The California Restaurant Association said last month that fast food prices have increased up to 8% since the law was promulgated.
But the trend of fast food prices rising due to rising restaurant operating costs is a persistent story in the industry, especially at McDonald’s. In 2008, chain went away of the $1 double cheeseburger, replaced by a $1.19 burger with two hamburger patties and just one slice of cheese, due to the price of beef and buns. noodle change.
Small changes to the chain add up: McDonald’s has seen Menu prices increased by 100% since 2014, according to credit card consulting firm FinanceBuzz, a trend replicated across the entire fast food industry. Popeye’s trailed the Golden Arches with an 86% price increase over the same period, with Taco Bell increasing its prices 81%. That price increase has outpaced the 31% inflation rate over the past 10 years.
But history suggests that fast-food chains have been rewarded for listening to struggling customers during tense economic times. Harry Balzer, a restaurant industry analyst at the NPD Group, predicted after the death of McDonald’s $1 cheeseburger that fast-food chains are aware of their customers’ weaknesses. rows will be the leading chains.
“We are seeing an increase in a number of restaurants that are having a lot of success with their value offerings,” Balzer told ABC at that time. “Right now, consumers are clearly looking for a deal, and those offering a new and noteworthy product are winning.”
