McDonald’s is set to lower prices on its combo meals amid rising costs that have been challenging for restaurant operators. Many have expressed concern over maintaining menu affordability.
The franchise in the U.S. has agreed to keep the prices of eight popular combos at under 15% of the total price of individual items, as per internal communications. So, for instance, a combo currently priced at $10 could drop to $8.50 with the new discount.
This decision came after weeks of pressure from McDonald’s, which eventually proposed subsidizing losses for operators. However, discussions indicated that this arrangement would only be viable if customer traffic increased.
The fast-food giant realizes there’s a need to enhance its image of affordability, especially following numerous complaints from customers about increasing menu prices.
According to CEO Kriskemputzynski, the company depends significantly on low-income customers who tend to visit more frequently compared to wealthier demographics. Joe Erlinger, who oversees U.S. operations, also noted that consumers are looking for better value and affordability from McDonald’s.
Discounted combos, including options like the Big Mac and Chicken McNugget, will start in early September. The combos will remain at these reduced prices through the beginning of next year.
Additionally, McDonald’s plans to introduce new value meals, such as a $5 sausage egg McMuffin and an $8 Big Mac meal. In November, they’ll offer a $5 sausage, egg, and cheese McGriddle along with a $10 10-piece Chicken McNuggets meal.
For most locations in the U.S., the combo prices are typically lower than purchasing items individually, though discounts can vary based on franchisee pricing.
Despite facing challenges with rising costs, including those for items like $1 drinks, McDonald’s has encouraged franchisees to limit price hikes on visible menu items.
In a recent investor call, Kempczynski mentioned that the overall perception of value is primarily shaped by the menu board. Operators reported struggles with some items costing over $10.
Sales were boosted by the McValue menu in the most recent quarter, succeeding where others had declined. Still, Erlinger highlighted that customer counts remain a concern.
Market research by Technomic indicates that the average cost for a large meal is around $10.53, soaring to $18.99 at more expensive spots like travel plazas or airports. Since 2019, the price for a Big Mac combo has jumped 27%.
Though McDonald’s and its franchisees are actively promoting new price deals, they face ongoing pressure from competitors like IHOP and Chipotle, which have also kept prices high. Economic challenges have led many Americans to dine at home more often, contributing to a reported decline in fast food sales.
