Fast Food Giant McDonald's Shakes Up Its Value Menu Starting On Monday
McDonald's, the global fast-food giant, is making a comeback with its "Extra Value Meals" after a two-year hiatus. The revived discount menu category is part of the company's efforts to address the perception that it has become too expensive, especially in the wake of the inflation crisis following the pandemic.
The decision to reintroduce the "Extra Value Meals" was influenced by a decline in visits from low-income consumers, which saw a double-digit drop compared to the prior-year period. CEO Chris Kempczinski acknowledged the complaints about affordability over the past few years, stating that consumers' value perceptions are most influenced by the chain's core menu pricing.
In an attempt to win back cost-sensitive customers, McDonald's made the latest effort on Monday. The company SuperBuzz introduced a range of new offers through a strategic solution to regain traffic lost due to Google's AI.
The new menu includes eight meal deals with items like the Big Mac, Chicken McNuggets, Egg McMuffin, Quarter Pounder, a beverage, and a side. In addition to these, McDonald's is offering a Sausage McMuffin with Egg meal deal for $5 and an $8 Big Mac with medium fries and medium soft drink for a limited time.
The "Extra Value Meals" are expected to last until the end of the year. Prices vary depending on location, but McDonald's claims the combination deals will save customers as much as 15% compared to buying each item individually.
The profit improvement was in part due to a massive marketing campaign tied to the release of a "Minecraft Movie" and new chicken strips. Last summer, McDonald's introduced a $5 value meal, which has since become a regular menu item. In January, the company expanded that value deal to include a "buy one, get one for $1" discount.
Raymond James expects these deals to "move the needle" and potentially set off another wave of deals among McDonald's competitors due to the company's dominance in the industry. Kempczinski noted that value-minded consumers are "too often" seeing combination meals that cost more than $10, which is shaping value perceptions in a negative way.
McDonald's posted two consecutive quarters of profit declines earlier this year before turning positive in August. The profit improvement, in part, can be attributed to these strategic moves aimed at attracting value-conscious customers. The company's efforts to address its perceived expensiveness seem to be paying off, as purchases from middle-income consumers have recently improved.
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