McDonald's launches $5 meal deal to reignite sales and appeal to budget-conscious diners

McDonald's is pushing a highly awaited $5 valued meal to revive the lacklustresales and to tempt consumers who have been cutting back fast-food spending. Their "$5 Meal Deal" will include the choice of either a McDouble cheeseburger or a McChicken sandwich, small French fries, 4-piece chicken nuggets, and a small soft drink at all participating McDonald's restaurants in the US from June 25 through a limited-time offer.

"We heard our fans loud and clear — they're looking for even more great value from us, and this summer that's exactly what they'll get," said Joe Erlinger, president of McDonald's USA, in a press release.

A deal for the newest value meal from McDonald's was first reported by the Wall Street Journal last month. Now, fast-food rivals like Burger King, Wendy's, and even Starbucks are rolling out deals of their own to try and win over budget-conscious customers.

The introduction of the McDonald's $5 Meal Deal comes at a great time, as it coincides with the chain's drive to get away from this perception that the restaurant is getting too pricey for everyday folk. That notion prompted Erlinger to pen an open letter regarding "viral social posts and poorly sourced reports" claiming McDonald's prices have increased by well over the rate of inflation.

“The average price of a Big Mac in the US was $4.39 in 2019,” he wrote. “Despite a global pandemic and historic rises in supply chain costs, wages and other inflationary pressures in the years that followed, the average cost is now $5.29. That’s an increase of 21 per cent (not 100 per cent).”

Results from online complaints with respect to fast food prices are manifesting themselves in reduced spending. Diners, upset by higher prices, are very well eating out less often and spending less when they do go out, so they contribute to an overall slowdown in sales at fast-food eateries and a decline in customer traffic.

In its announcement Thursday, McDonald's said other franchisees are also offering special deals to attract more customers. Those include a "buy one, get one" deal for $1 breakfast sandwiches in Memphis and a double cheeseburger plus small fries combo for $3.50 in Columbus, Ohio.

“Affordable prices and creating memorable moments are what McDonald’s is all about,” said John Palmaccio, a McDonald’s owner and chair of the Operator’s National Advertising Fund. “As small business owners, it’s our responsibility to deliver great value to our local communities when they need it most.”

The fast-food giant is set to release its next earnings report in late July. How well the new value meal is performing will likely play a large role in assessing the strategy of the company to recapture momentum and appeal to price-conscious consumers amidst a competitive fast-food landscape.

The $5 Meal Deal will certainly sweep in more sales with its appeal, but for McDonald's, it also stands to drive that hard psychological message across to customers: It remains committed to value price services in restaurants while retaining customer loyalty in an economy wracked with hardship.