- McDonald’s strategy with its $5 meal deals has been paying off.
- Chris Kempczinski, the company’s CEO, said that the $5 deal is “driving other purchases,” increasing average spending.
- The chain is doubling down on its McValue meals to attract a cost-conscious consumer base.
McDonald’s bet on cheap meals is paying off.
In a Monday earnings call, McDonald’s CEO, Chris Kempczinski, said that its $5 meal deals in the US were getting customers to spend more than just $5.
“If you look at the $5 meal deal, even though that’s compelling value, it’s driving other purchases,” Kempczinski said to investors in the call.
He added, “So the average check on $5 meal deal for us in the US is north of $10. So it’s doing what we were hoping for when we launched that.”
The $5 meal deal includes a McChicken or McDouble burger, four pieces of chicken nuggets, a small soft drink, and a small serving of fries. The deal was only supposed to last for a month when it was introduced in June, but the chain announced in November that it would be making the deal a permanent fixture in its McValue menu.
Kempczinski said that other value meal options, like the “Buy one, Add one for $1” deals, which allow customers to buy one menu item for full price and the next for $1, have also been performing “very much in line” with their expectations.
The chiefs said in the call that the chain is also seeing good results for its value meals for international markets.
Ian Borden, McDonald’s finance chief, talked about the Canadian McValue menu on the call — an offering that includes a $5.79 meal bundle and a $1 coffee. He said the coffee deal “drove coffee share gains in the quarter.”
In Germany, it introduced an extended McSmart menu, which features deals like a double cheeseburger or double chicken burger, a drink, and medium fries for €4.99, or $5.14.
Borden said that in Germany, the chain “continued to drive market share gains by expanding upon the already successful McSmart menu now offering a range of meal bundle options introduced at the end of September.”
He also added that the chain also introduced a similar GBP5 meal deal in the UK.
McDonald’s saw a 0.4% increase in global same-store sales in the latest quarter, with its US same-store sales decreasing by 1.4%. The company posted a global fourth-quarter revenue of $6.39 billion.
The company’s stock price had risen about 4.8% when markets closed on Monday.
Food and beverage chains have been betting on value deals to attract an increasingly cost-conscious consumer base around the world.
Pizza Hut in China saw sales of its pizzas under $7 rise 50% in 2024. Starbucks now offers free brewed coffee and tea refills to customers at participating stores.
This comes as Americans have been put off by the rising prices of fast food in recent years, with some opting to eat at home.
Representatives for McDonald’s did not respond to a request for comment from Business Insider sent outside regular business hours.
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