NBC News Top StoriesMcDonald’s $5 “Meal Deal” appears to be bringing back bargain-hungry customers amid broadly higher post-pandemic food prices.
McDonald’s $5 “Meal Deal” appears to be bringing back bargain-hungry customers amid broadly higher post-pandemic food prices.
McDonald’s $5 “Meal Deal” appears to be bringing back bargain-hungry customers amid broadly higher post-pandemic food prices.The fast-food giant reported profit and sales Monday that missed analysts’ expectations. acknowledging an industry-wide slowdown as consumers eat at home more often and trade down to cheaper items.
McDonald’s says $5 value meal sales are hot as consumers feel ‘pinch’ of inflationThe deal has been extended at least through August as customers hunt for bargains.A sign advertising McDonald’s new “$5 Meal Deal” A sign advertising McDonald’s new “$5 Meal Deal” on June 25, 2024, in New York.Anthony Behar / Sipa USA via APJuly 29, 2024, 8:43 PM GMT+5:30By Rob WileMcDonald’s $5 “Meal Deal” appears to be bringing back bargain-hungry customers amid broadly higher post-pandemic food prices.The fast-food giant reported profit and sales Monday that missed analysts’ expectations. acknowledging an industry-wide slowdown as consumers eat at home more often and trade down to cheaper items.ADVERTISINGAnd while McDonald’s reputation as a lower-cost option continues to put it at an advantage, it is a shrinking one.”Consumers still recognize us as the value leader versus our key competitors, but it’s clear that our value leadership gap has recently shrunk,” CEO Chris Kempczinski said on an earnings call Monday.Since the onset of the pandemic in the spring of 2020, overall food prices in the U.S. economy have climbed approximately 24%, according to the Bureau of Labor Statistics, with food-away-from-home costs surging 27% as restaurants faced higher labor and supply costs.While McDonald’s had weathered the resulting consumer environment as well as anyone, it began to see worsening results more recently as customers’ post-pandemic spending boom waned.Enter McDonald’s $5 Meal Deal, which includes a McChicken or McDouble (a reduced-size double cheeseburger), a four-piece McNugget portion, fries and a drink.Launched in late June — largely before its impact could be reported in the company’s latest earnings report — the offering showed immediate results and was being extended at least through August in most U.S. markets.”We’ve seen a lot of enthusiasm and the number of $5 Meal Deals sold are above expectations,” McDonald’s U.S. President Joe Erlinger said on the call. While the combo was proving most popular among lower-income consumers, executives said average checks that include the deal have been been over $10, something he said showed consumers are using it as an add-on to regular orders.And from a brand-improvement perspective, Erlinger said the offering had begun to reset the chain’s perception for value and affordability.