McDonald’s has launched its highly anticipated value menu featuring a $5 meal deal, including a choice between a McDouble burger or McChicken sandwich, accompanied by four-piece chicken McNuggets, small fries, and a small soft drink.
Joe Erlinger, president of McDonald’s USA, emphasized the focus on affordability in a recent press release, aiming to draw customers back amid a challenging first quarter with US same-store sales slightly below expectations at 2.5%. The company also faced revenue growth and same-store sales challenges across all segments.
Franchisees are optimistic that the limited-time $5 meal deal will increase foot traffic, despite anticipating reduced profit margins. “Value promotions never increase margins — never,” commented an anonymous McDonald’s franchisee to Yahoo Finance. “They do drive guest counts. Hopefully, the increase in guest counts will offset the slimmed-down margins.”
TD Cowen analyst Andrew Charles noted that the value offering serves as a lure to boost customer visits, suggesting that encouraging orders of premium or additional items can enhance profitability.
Amid accusations of price hikes, Erlinger addressed concerns in a blog post detailing increases in the cost of items like the Big Mac and Quarter Pounder, which have risen approximately 20% since 2019.
McDonald’s initiative comes amidst a broader trend, with other chains also joining the value segment. Recently, kfc” target=”_blank” rel=”noopener” title=”KFC” data-wpil-keyword-link=”linked”>KFC introduced a $4.99 meal, while Burger King” data-wpil-keyword-link=”linked”>Burger King brought back its $5 Your Way Meal in late May.