McDonald’s is making good on its promise to fix its value perception throughout all dayparts.

The burger giant and its franchisees reportedly agreed to cut the price of eight combo meals so that they’re 15 percent less expensive than if the items were bought separately, according to the Wall Street Journal and CNN. The changes will go into effect in September and stay through the start of 2026. McDonald’s will provide financial support to operators who agree to lower their prices. Franchisees and corporate will also contribute to marketing the deals, the Journal reported.

Additionally, the brand will soon debut breakfast meal deals and Big Mac and 10-piece McNugget combo promotions under the “Extra Value Meals” banner. The $5 Sausage Egg McMuffin and $8 Big Mac meals will come in September and the $5 Sausage, Egg and Cheese McGriddle and $8 10-piece Chicken McNugget meals will come in November.

The average price for a Big Mac meal and Quarter Pounder with Cheese meal is $10.25 and $10.20, respectively, according to a recent Raymond James pricing study. This is generally a 10 to 11 percent discount on average versus ala carte pricing, meaning the new initiative will add an incremental 4 to 5 percent discount. The Extra Value Meals (the $8 Big Mac and 10-piece McNugget combos) will be around a 20 percent discount.

McDonald’s same-store sales lifted 2.5 percent in Q2 after two straight quarters of negative comps. The brand attributed the growth to a mixture of menu innovation, like the Minecraft Movie Meal and McCrispy Strips, and value promotions such as the $5 Meal Deal and the Buy One, Get One for $1 deal. The chain brought even more value in July with $2.99 nationally advertised Snack Wraps and the addition of the Daily Double Burger as a new entrée option in its Meal Deal special.

However, CEO Chris Kempczinski noted that 50 percent of guests aren’t coming into restaurants, using McValue, or subscribing to the loyalty program. Instead, they’re looking at core menu pricing at the drive-thru and believe the brand is priced too high.

“Today too often if you’re that consumer, you’re driving up to the restaurant and you’re seeing combo meals, could be priced over $10, and that absolutely is shaping value perceptions and is shaping value perceptions in a negative way,” Kempczinski said during the chain’s Q2 earnings call on August 6. “So we’ve got to get that fixed … We’re having, I think, very active and productive conversations with the franchisees, but the single biggest driver of what shapes consumers’ overall perception of McDonald’s value is the menu board, and it’s when they drive up to the restaurant and they see the menu board. That’s what’s shaping that. That’s the number one driver. So we’ve got more work to do on that in the U.S.”

Kempczinski also said breakfast is “absolutely the weakest daypart,” which supports the brand’s push for more value offerings in the morning.

“There’s also conversations around what more we might be able to do with breakfast value,” the CEO said earlier this month. “So for us, breakfast is still a big part of the business. It’s one that we think we have a right to win in, but it’s one that right now is under pressure because of the economic issues that I’ve cited, and there’s work underway to figure out what else we need to do to restimulate growth there.”

In addition to slashing combo prices, McDonald’s and franchisees have already agreed to keep the $2.99 nationally advertised price point for Snack Wraps in place through the remainder of 2025. Kempczinski described this as “good alignment with franchisees on the need and power of national advertised price points,” adding that it drives more incrementality than if operators set their own pricing.

McDonald’s is responding directly to lower-income consumers, whose visitations dropped by double digits versus the prior year period. This is of particular importance to the chain since low-income guests usually visit its restaurants more often than middle and high-income consumers.

 

SOURCE: QSR News