After the recent backlash to higher prices at the popular fast food chain, McDonald’s is preparing to launch a $5 meal deal to encourage its customer base to return.
This new deal comes as a part of the fast food giant’s attempt at a new price strategy that offers affordable, quick meals that won’t break the bank.
McDonald’s High Prices Are a Problem
Earlier this year, McDonald’s received widespread criticism after a video of its $18 Big Mac meal and $6 side of hash browns went viral.
The soaring prices and the company’s recent struggle with the ongoing war in Gaza have caused the company to lose a significant amount of revenue in the last quarter.
Workers’ Wages Spike Menu Prices
In California, the menu prices for McDonald’s soared again after the state implemented its $20 minimum wage law. California has recently increased the minimum wage to $20 per hour for fast-food workers in establishments part of a chain with at least 60 locations nationwide.
One TikToker reported that there was no longer an item on the menu that cost $1 despite McDonald’s CEO Chris Kempczinski announcing that the company would be pushing its 1-2-3 value menu.
McDonald’s Loses Business
More and more customers are choosing to stay home and eat as inflation and the threat of a recession have cut the expensive fast food chains out of their daily lives.
According to Restaurant Business, people learning less are choosing to eat at home to save money as prices rise across the board.
McDonald’s Offers New Deal
While prices vary from chain to chain, McDonald’s is attempting to offer a new plan that brings back its customer base.
One way McDonald’s is trying to do this is by offering a $5 meal, which includes a McDouble or McChicken, a four-piece McNuggets, fries, and a drink.
No Release Date for the Deal
However, it is not clear which of McDonald’s 13,500 US locations will roll out the $5 meal deal, or when.
Representatives for the fast food giant have not announced any dates or locations for the new deal to be available to customers who are looking for a good deal.
Laser Focused on Affordability
This meal deal comes after Kempczinski told investors that the company would be “laser-focused on affordability” after reporting weaker-than-expected first quarters earnings.
Keeping costs low, which could include cutting back on employees’ hours and encouraging chains to not raise prices to compensate for the new wages, seems to be a priority as McDonald’s realizes that new meals and loyalty programs are not what customers want.
The Deal Last for a Month
However, this deal isn’t going to last. According to Business Insider, the $5 deal will only be available for a month.
“I think it’s important to recognize that all income cohorts are seeking value,” CEO Chris Kempczinski said last month on a post-earnings call.
Prices Keep Rising
This budget-friendly option is the second time the fast-food giant has floated the promotion to US stores, hoping to bring customers back after its 100 percent price increase over the last decade (via FianceBuzz).
What makes this deal different from the previous promotion is that it would be a standard national offering and not a local value meal offering.
Where the $5 Meal Shines
A $5 meal would be a stark drop from current prices, especially in higher-cost cities. In New York, this four-piece meal would cost about $18.26.
In San Francisco, the McChicken version costs $16.15 and the burger options cost $17.75. This deal would be a home run for consumers but could be a headache for franchisee owners.
Fast Food Is Unaffordable
Fast food chains are struggling across the US as inflation and higher menu prices are starting to make people consider fast food an unfavorable, unaffordable option.
Almost all fast food chains report that they saw a dip in earnings last quarter, and are exercising caution on prices.
Franchisee Owners Might React Badly
“We’re going to stay careful on pricing,” Gunther Plosch, Wendy’s CFO, said in its earnings call earlier this month. “I don’t think we’re going to get too greedy.”
While McDonald’s will eventually roll out its $5 meal, the backlash from franchisee owners might not favor the customers coming in for the deal.
