McDonald's diners made no effort to express how they felt about the burger giant raising prices to $8 for a chicken sandwich and $18 for a Big Mac, a phenomenon they reluctantly dubbed “McFlation.”
“It's $25.39 for a 40-count nugget and two large fries. Can't you even throw a sprite?” complained one TikToker.
Now the fast food giant is avoiding further dealings with its customers, and plans to offer a $5 meal offer to US customers for a limited time. Bloomberg mentioned. The meal package can include a McChicken or McDouble, fries, and a drink, resembling similar promotions from the chain in other countries, such as Germany. Maxmart Menu. Coca-Cola will reportedly contribute money to the fast food chain to offset potential losses in profitability.
McDonald's USA said luck The company always offers similar meal packages, with 90% of franchisees selling meal packages for $4 or less. The company declined to comment on a potential $5 meal deal.
The move will fulfill CEO Chris Kempczinski's promise to increase cost-effective menu items after McDonald's missed earnings expectations for the first time in nearly four years in the fourth quarter of 2023, in part due to higher prices. Kempczinski acknowledged that consumers making less than $45,000 a year – which was McDonald's core customer base – were no longer eating at the burger chain, choosing instead to cook at home thanks to… Cooling inflation of grocery stores.
“I think what you'll see heading into 2024 is probably more interest in what I would describe as affordability,” Kempczinski told analysts in February. “The battleground is definitely with that lower-income consumer.”
McDonald's weak sales in the first quarter of 2024 reiterated the need for a push toward affordability. While the company is still reeling from boycotts related to the ongoing conflict in Israel and Gaza, McDonald's also credited its sales with 1.9% growth, which just missed. BloombergExpectations of low-income clients withdrawing. Kempczinski also alluded to economic menu deals, describing online promotions as effective but “very fragmented.”
Privilege doubts
Despite customers' calls for cheaper food, the new $5 meal deal is not universally loved. Bloomberg She mentioned that some franchisees are concerned about the company losing money while promoting. Some restaurant operators, who get input into McDonald's marketing campaigns, did not agree to the $5 Meal Deal initiative earlier this year. Instead, it prompted an independent franchisee to reintroduce products such as snack wraps, which in addition to being less expensive, are also easier to make.
And in states like California — which recently raised the minimum wage for fast food workers to $20 — franchisees have repeatedly warned customers not to raise prices to offset increased labor costs and inflation. The California Restaurant Association said last month that fast food prices had risen rose to 8% Since the law was issued.
But trends toward a gradual rise in fast food prices at the expense of increasing restaurant operating costs is an ongoing story in the industry, especially at McDonald's. In 2008, the series I got rid of it With the $1 double cheeseburger replaced instead with a $1.19 burger with two hamburgers and just one slice of cheese, he attributes the change to increased prices for beef and buns.
Small changes add up to the chain: McDonald's has seen it 100% increase in menu prices Since 2014, according to credit card consulting firm FinanceBuzz, it's a trend that's being replicated across the entire fast food industry. Popeyes is close behind the golden arches, with its prices rising by 86% in the same period, with Taco Bell prices rising by 81%. This price inflation has exceeded the inflation rate of 31% in the past ten years.
But history suggests that fast food chains have been rewarded for listening to frugal customers in times of economic stress. Harry Balzer, a restaurant industry analyst at NPD Group, predicted after the death of McDonald's $1 cheeseburger that fast-food chains that recognize customers' vulnerabilities will be the ones to come out on top.
“We have seen interest in a number of restaurants that are very successful because of their value propositions,” Balzer said ABC said on time. “Right now, consumers are clearly looking for a deal, and those who offer a new and notable one are the winners.”