In response to increasing food prices and a competitive fast-food market, McDonald's has decided to extend its popular "$5 Meal Deal" through August. Initially introduced in late June as a limited-time offer, the deal has proven to be a hit among customers, prompting nearly all of the chain's U.S. locations to keep it on the menu for longer.
The "$5 Meal Deal" includes a choice between a McDouble cheeseburger or a McChicken sandwich, small French fries, a four-piece Chicken McNuggets, and a small soft drink. Originally planned to last just one month, the promotion quickly garnered positive feedback from customers who were drawn to its value during a period of rising food costs. McDonald's executives noted in an internal memo obtained by CNN that the deal has been "resonating with our millions of customers" and has been successful in drawing business away from competitors.
"Myra Doria, national field president, and Tariq Hassan, U.S. chief marketing and customer experience officer, emphasized in the memo that when customers opt for the $5 Meal Deal, they are less likely to visit other fast-food chains," the memo stated. This has contributed to a notable increase in traffic to McDonald's restaurants, even encouraging some customers to purchase additional full-priced items.
The decision to extend the promotion comes as the fast-food industry faces challenges related to higher food prices and changing consumer behavior. Many diners are eating out less frequently and spending less when they do, leading to a slowdown in fast-food sales and a decrease in restaurant traffic. In this context, value deals like McDonald's $5 offering have become crucial tools for attracting budget-conscious customers.
McDonald's is not alone in this strategy. Other major fast-food chains, including Burger King, Wendy's, Taco Bell, and Starbucks, have also introduced their own meal deals in recent weeks. These promotions, typically ranging from $3 to $5, are designed to appeal to consumers looking for affordable dining options in a highly competitive market.
The success of McDonald's $5 Meal Deal is backed by data from Pacer.ai, a third-party analytics firm, which reported that the promotion has significantly boosted restaurant traffic. This indicates that the deal has been well-received by McDonald's fans and has helped the chain regain momentum amid challenging economic conditions.
The internal memo, as reported by CNBC, revealed that 93% of McDonald's U.S. locations have decided to continue offering the $5 Meal Deal through August, with some units still considering whether to extend it further. The memo highlighted the importance of driving guest counts to sustain business growth, stating, "We must remember that driving guest counts ultimately propels our business and is the key to sustained growth."
To support the initial launch of the value meal, Coca-Cola contributed marketing funds, making the offer more attractive to franchisees. Some franchisee advocates are now pushing for ongoing contributions from the company to ensure the discounted offering remains viable in the long term.
As McDonald's prepares to release its earnings report on July 29, the extended promotion is expected to play a role in the company's financial performance. The decision to maintain the $5 Meal Deal reflects a broader trend within the fast-food industry, where value-driven promotions are becoming essential in attracting and retaining customers.
