McDonald’s price cuts are reshaping the US dining market as the company works to restore value perception. The chain will lower prices on select combo meals to attract budget-conscious customers. As a result, industry analysts expect rivals to respond with their own promotions.
The new Extra Value Meals will combine items such as a Big Mac, Egg McMuffin, or McCrispy with fries or hash browns and a drink. Prices will vary by region, yet the bundles will cost about 15 percent less than buying items separately. To highlight the launch, McDonald’s will offer an $8 Big Mac meal and a $5 Sausage McMuffin meal in most states. However, diners in California, Alaska, Hawaii, and Guam will pay $1 more.
For years, visits from households earning under $45,000 have steadily declined. Executives admit that many customers no longer view the chain as affordable. A 10-piece Chicken McNugget meal, for example, now costs over $10 in Chicago. Consequently, higher menu costs have reduced visits from value-driven consumers.
Although same-store sales rose 2.5 percent in the last quarter, growth came mostly from higher prices. Lower-income diners cut their visits by double digits across the sector. McDonald’s leadership acknowledged that combo meals priced above $10 created negative value perceptions.
The company faces another challenge: wide regional price variations. Earlier this year, an $18 Big Mac meal in Connecticut went viral. McDonald’s defended the case as unusual, noting that franchisees set local menu prices.
Meanwhile, the company said menu prices increased 40 percent since 2019 due to higher labor, packaging, and food costs. To ease pressure, McDonald’s introduced a $5 Meal Deal with a McDouble or McChicken, fries, and a drink. The deal became popular and was extended. Later, the chain added $1 promotions tied to a full-price item. These deals will remain available alongside the new bundles.
Other fast food chains have already joined the battle. Domino’s launched its “Best Deal Ever,” offering any pizza with unlimited toppings for $9.99. Industry data shows that overall US customer traffic declined nearly 1 percent in the second quarter. At the same time, slower price increases and new discounts reveal how competition is intensifying.
In conclusion, McDonald’s price cuts highlight the company’s focus on restoring affordability and customer loyalty. With US diners demanding value, competitors will likely match or even expand promotions. As McDonald’s price cuts reshape the market, consumers could benefit from a broader fast food price war.
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