New York (CNN) — McDonald’s is slashing the prices of its combo meals just a few weeks after the CEO publicly admitted that its menu has gotten too expensive and pledged to fix the problem.
McDonald’s and its US franchisees agreed to price eight popular combo meals at 15% less than the total cost of buying the items separately, with the chain offering financial support to franchisees if they agree to lower prices, according to a source familiar with the company’s plans. The lower prices will go into effect next month.
The Wall Street Journal first reported the news. McDonald’s declined to comment.
McDonald’s will also expand its combo offerings with a $5 breakfast deal and an $8 Big Mac and McNugget special in the coming months with the reintroduction of the “Extra Value Meals” branding.
McDonald’s CEO Chris Kempczinski said in its August 6 earnings call that “consumers’ value perceptions are most influenced by our core menu pricing,” a nod to the perception from many customers that the chain has become unaffordable over the past several years.
The inflation crisis that followed the pandemic altered many customers’ views of McDonald’s — from a cheap place to get a quick meal to a pricey fast food restaurant that barely undercut a higher-quality sit-down restaurant alternatives like Applebee’s or Chili’s, with the latter thriving over the past few years.
Value-minded consumers are “too often” seeing combination meals that cost more than $10 and that is “shaping value perceptions in a negative way,” Kempczinski admitted earlier this month.
“The single biggest driver of what shapes a consumer’s overall perception of McDonald’s value is the menu board,” Kempczinski told analysts on McDonald’s earnings call. “And it’s when they drive up to the restaurant and they see the menu board, that’s what’s shaping the that’s the number one driver.”
“We’ve got to get that fixed,” he added.
In 2023, an $18 Big Mac combo meal went viral, sparking a debate that the chain has drifted from its affordability roots. The meal was a one-off at a rest stop – but it sparked furor online, and it later prompted a rare open letter from the president of McDonald’s USA saying the pricey meal was an “exception,” and the chain’s prices haven’t outpaced inflation.
McDonald’s has since focused its efforts on expanding its value menu and improving other parts of its menu, including its revamped chicken strips and new drinks. McDonald’s $5 value meal debuted last year and stabilized sales, at least temporarily, after the company bet correctly that customers were in search of combinations that stretched their dollars.
Themed meals, like a recent collaboration with “A Minecraft Movie,” have also proven to be a winner for the chain, recently putting an end to two consecutive quarters of sinking sales.
The-CNN-Wire
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