According to a source familiar with the plans, McDonald's is considering adding a $5 meal to its menu in the United States as a way to get customers to return to its restaurants.
The meal could include a choice of a McChicken, a McDouble or four-piece chicken nuggets, as well as fries and a drink, the person told CBS MoneyWatch. Leaders at McDonald's corporate offices are still in talks with franchise owners about introducing the $5 meal, the source said.
Discussions about launching a new budget meal come just weeks after McDonald's executives reported slower growth in foot traffic at its restaurants. Some customers tired of inflation they are cutting back on fast food after many chains, from McDonald's to Subway, have raised prices in recent years to offset higher labor and ingredient costs.
The company needs to be “laser-focused” on keeping prices affordable to convince customers to return, McDonald's CEO Chris Kempczinski said during an April 30 earnings call with analysts and investors.
“Consumers continue to be even more discriminating with every dollar they spend as they face high prices in their everyday spending, which is putting pressure on the industry,” Kempczinski added. “[I]It's imperative that we continue to keep affordability at the forefront for our customers.”
McDonald's prices
Among all U.S. fast-food chains, McDonald's raised its menu prices the most between 2014 and 2024, according to personal finance website FinanceBuzz. About 25 percent of people making less than $50,000 are cutting back on fast food, citing cost as a concern, a January survey by consulting firm Revenue Management Solutions found.
Restaurant chains point to rising labor costs as a key factor driving up prices. Still, industry analysts said fast-food chains must court lower-income customers if they want to continue to meet revenue and profit projections.
“When you look at McDonald's, they don't get the majority of high-income customers — the middle and lower income class is the bulk of their business,” analyst Mark Kalinowski, president of Kalinowski Equity Research, told CBS MoneyWatch . month. “They have to be careful with their spending, and that's what you're seeing right now.”
Of course, a $5 meal wouldn't necessarily make McDonald's a pioneer in the fast food industry. In 2015, Wendy's introduced the $4 for $4 meal that includes a small burger, four-piece chicken nuggets, fries and a small drink, and in 2019, the restaurant added its $5 Biggie Bag. The latest deal includes a choice of sandwich, four chicken nuggets, a small order of fries and a small drink.
McDonald's, the nation's largest fast food chain, employs more than 2 million people in its 14,300 restaurants and another 150,000 employees in its corporate offices.
