McDonald’s May Be Mulling Big New Value Menu Move Amidst Rising Prices
McDonald's is reportedly considering a new $5 value meal, which would include an entree, side, and drink, in order to combat criticism over rising prices.
McDonald’s is mulling the idea of introducing a new $5 value meal to menus across the U.S. It’s the latest move by the chain to address criticism of its rapidly rising prices, which have increased 100 percent since 2014. Earlier this month, the chain announced it would be debuting a “larger, satiating” burger aimed at giving customers more bang for their buck.
According to sources who spoke with CBS News and Bloomberg, the meal could include French fries and a beverage, along with your choice of either a McChicken, a McDouble, or a four-piece Chicken McNuggets. The deal is similar to a $5 meal offered by Wendy’s.
McDonald’s corporate offices are still speaking with franchise owners about rolling out the value meal, but it appears at this time that the option will be priced at $5 throughout all locations. McDonald’s franchisees have historically been responsible for setting their restaurant’s prices.
Bloomberg reported that franchisees have already rejected the value meal proposal once. McDonald’s returned to the table with added marketing funds from Coca-Cola to sweeten the deal, but the talks are ongoing.
After seeing waning foot traffic during Q1, McDonald's has been “laser-focused” on maintaining affordable prices, CEO Chris Kempczinski said in an April 30 earnings call. A January poll by Revenue Management Solutions found that roughly 25 percent of those who earn $50,000 or less annually are avoiding fast food because the prices have become too hard to justify. Rising labor costs have been a primary reason for the price increases.
"Consumers continue to be even more discriminating with every dollar that they spend as they face elevated prices in their day-to-day spending, which is putting pressure on the industry," Kempczinski explained. "[I]t's imperative that we continue to keep affordability at the forefront for our customers."
McDonald’s has been seeing great success with its snack-centric spin-off, CosMc’s, which positioned itself as a direct competitor to Dunkin and Starbucks. After opening its first location in Illinois, two more CosMc’s restaurants quickly popped up in Texas. A recent earning report found that the chain is seeing markedly more foot traffic than its competitors at key times of the day.
McDonald’s plans to open more CosMc’s locations by the end of 2024, which will certainly provide some good word-of-mouth for the chain as it seeks to win back the trust of thrifty customers.
McDonald’s is reportedly waiting for agreement from its franchisees before adding the proposed $5 value meal to menus. The chain did not respond to a request for comment from Men’s Journal.