$5 McDonald’s Meal Hits Menus As Golden Arches Looks To Lure Customers Back

EleonJune 26, 2024

7 2 minutes read

McDonald’s Meal Hits Menus As Golden Arches Looks To Lure Customers Back

McDonald’s (MCD) is releasing its highly anticipated economy menu.

On Tuesday, the Golden Arches launched its $5 meal deal, which includes the choice of a McDouble burger or McChicken sandwich, in addition to a four-piece Chicken McNuggets, small fries and a small soft drink.

McDonald’s U.S. President Joe Erlinger said in a press release that the team is “focused” on affordable options as the company looks to bring customers back in the door. This follows a difficult first quarter, in which U.S. same-store sales rose 2.5%, slightly below the 2.55% expected, as well as a lack of revenue growth and same-store sales across all segments and company profits.

Franchisees hope that this agreement, which will be in effect for a limited time, will encourage consumers to visit McDonald’s restaurants more. However, they also expect their margins to be affected.

“Value promotions never increase margins, ever,” one McDonald’s franchisee, who wished to remain anonymous, told Yahoo Finance. “They determine the number of guests. Hopefully, the increase in customers will compensate for the decrease in margins.

Andrew Charles, an analyst at TD Cowen, said offering value is the way to bring consumers back in the door. But, he added, it’s important that the restaurant encourages customers to order premium or additional items to “really help maximize profitability.”

Why now ? McDonald’s wants consumers to stop thinking the fast food chain is too expensive and show them it has the right deal at the right price.

Following accusations that he raised prices, Erlinger posted a blog to share, among other things, the cost increases of the Big Mac and the Quarter Pounder. The average prices of both burgers have increased by around 20% since 2019.

McDonald’s is not alone; other chains are also getting in on the value craze.

In early April, KFC (YUM) launched a $4.99 meal that included two pieces of chicken, a side of mashed potatoes and gravy, and a biscuit. In late May, Burger King (QSR) brought back its $5 Meal Your Way, which includes your choice of a Chicken Jr., Whopper Jr. or Bacon Cheeseburger, Fries, Nuggets and a beverage.