In an effort to counteract the increasingly difficult environment for customers, McDonald’s is attempting to launch a discount meal in American locations, two people with knowledge of the situation told CNBC.
According to the sources, the $5 meal may consist of four items: fries, a drink, a McChicken or McDouble, and four pieces of chicken nuggets.
The prospective new product is being offered at a time when low-income customers are starting to cut back on their purchases, especially from fast-food chains.
According to statistics from Bank of America, mentions of low-income clients on firm earnings calls are at their best points in over two years. CEOs at Wendy’s, Dave & Buster’s, McDonald’s, and Wendy’s have all mentioned the expenditure limitation.
McDonald’s just released its first-quarter results, which were mixed and included mild disappointment in U.S. same-store sales. Average checks increased as a result of higher prices, however some customers withdrew due to the higher expenses.
During the company’s April 30 earnings call, CEO Chris Kempczinski stated, “Consumers continue to be even more discriminating with every dollar that they spend as they faced elevated prices in their day-to-day spending, which is putting pressure on the [quick-service restaurant] industry.”
In order to draw customers, he continued, McDonald’s needs to be “laser-focused” on price.
Ian Borden, the business’s chief financial officer, stated that the U.S. leadership team was collaborating closely with owner-operators in this setting during the call. Kempczinski stated that the company is working on a nationwide value offer in the United States.
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When it comes to promotions that potentially reduce owners’ income, McDonald’s corporate and franchisees, who oversee 95% of McDonald’s stores and have a say in such matters, frequently disagree.
According to someone acquainted with the process, McDonald’s first proposal for the $5 value meal did not clear all the required obstacles, and more elements are currently being considered.
According to a second source, Coca-Cola increased the amount of marketing money involved in order to sweeten the deal.
