The fast food giant is trying to win back customers and tackle the competition with a new limited-time discount menu.
McDonald’s is finding out if bringing back the $5 menu will be enough to win back millions of customers frustrated by high fast food prices. «We’re hearing our fans loud and clear: they’re looking for better from us, and this summer they’ll get it,» said Joe Erlinger, president of McDonald’s USA, in a press release.
To show they are still the best option for low-income consumers, McDonald’s locations in the United States will launch a $5 menu starting June 25th, including a McDouble cheeseburger or a McChicken sandwich, fries, four chicken nuggets, and a small drink.
«It’s never been more important than today»
«We know how much it means to our customers that McDonald’s offers a great menu and communicates it through national advertising. This has been true since our inception, and it’s never been more important than today,» the company said in a statement to CNBC in mid-May.
With a limited-time offer, the Chicago-based fast food giant hopes to boost weak sales in recent quarters by attracting customers who are cutting back their spending to keep up with competitors. It is also trying to quell complaints on social media about the $25 combo at some locations.
Erlinger called the viral accusations «. . unfounded» and said McDonald’s prices have risen far above the inflation rate due to the pandemic and historic increases in supply chain costs, wages, and other inflationary pressures, with the average cost being $5.29. That’s an increase of 21% (not 100%), he wrote in an open letter.
McDonald’s also brought back the exclusive Free Fries Friday app service, allowing customers to get a medium fries for free with any $1 purchase or more until the end of 2024.
«Courage has always been part of our DNA. We are focused on living up to that legacy and providing delicious and affordable options that customers can enjoy every time they walk through our doors, drive-thru, or order through our app,» the company said in a statement on Thursday.
McDonald’s competitors are strengthening
Since news broke a month ago about McDonald’s new cheap meal, the competition hasn’t delayed similar promotions. Burger King relaunched its $5 «Your Way Meal» a few weeks before its long-time rival. Burger King’s offer includes one of three sandwiches with a slice, fries, and a drink. Burger King plans to keep its offer for several months, unlike McDonald’s, which will maintain the promotion for about four weeks.
Meanwhile, at the end of May, Wendy’s began selling a $3 breakfast combo that includes a small portion of seasoned fries and a choice of a bacon, egg, and cheese English muffin or a sausage, egg, and cheese bagel. Jack in the Box, Subway, and other fast food chains already offer low prices. Even Starbucks, which doesn’t compete in value stores, sells a «for couples» menu starting at $5.
With the high cost of food and living in general, consumers have chosen with their wallets, and as inflation continues, companies serving low-income customers face a particular challenge in attracting customers.
McDonald’s last quarter missed earnings estimates for the first time in two years and acknowledged in a statement that consumers are becoming more discerning with every dollar spent. Meanwhile, the shift toward eating at home has been accelerated by retailers like Target, Walmart, and Kroger, which keep prices low on everyday essentials.