McDonald’s is gearing up to roll out a new value meal across its U.S. outlets, aiming to go through an increasingly challenging consumer market, according to two individuals familiar with the situation as reported
The proposed $5 meal is anticipated to comprise four components: a choice between a McChicken or McDouble sandwich, four chicken nuggets, a serving of fries, and a beverage. The disclosure of this value meal was initially made public.
This potential addition to the menu comes at a juncture where consumers with lower incomes are beginning to tighten their purse strings, particularly evident in reduced spending at fast-food chains.
Bank of America data reveals that mentions of low-income consumers during company earnings calls have surged to their highest levels in almost two years.
This conservative spending behavior has been acknowledged by executives across the industry, from McDonald’s to Wendy’s and Dave and Buster’s.
McDonald’s recently released its first-quarter results, which presented a mixed performance, with U.S. same-store sales slightly falling short of expectations.
While increased prices contributed to higher average checks, some consumers scaled back their spending due to the heightened costs.
CEO Chris Kempczinski highlighted the discerning nature of consumers amidst increased prices during the earnings call on April 30, stressing the necessity for McDonald’s to be “laser-focused” on offering affordability to entice patrons.
During the call, Kempczinski revealed that the company is actively developing a nationwide value deal for the U.S. market, with Chief Financial Officer Ian Borden mentioning the close collaboration between the U.S. leadership team and owner-operators in this challenging climate.
These owner-operators, who oversee 95% of McDonald’s locations, often find themselves in disagreement with the corporate entity over promotions that could potentially impact their profits negatively.
Initial plans for the $5 value meal proposed by McDonald’s encountered obstacles and are currently undergoing further discussions to refine details, according to one source familiar with the process.
Another individual noted that Coca-Cola has contributed additional marketing resources to enhance the attractiveness of the deal.
