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McDonald’s $5 deal is a “psychological” success, analysts say


McDonald’s  deal is a “psychological” success, analysts say

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McDonald’s $5 menu deal was a hit among inflation-stricken consumers, which proves that in the war of values, the bundle devouring the competition.

The fast-food giant recently announced an extension of the deal until December in selected US markets, following the success in the summer, which attracted “tens of millions” of customers, according to Joe ErlingerPresident of McDonald’s USA.

Erlinger claims that bundling is a way to keep prices “as affordable as possible,” but there are more It is not only the low price that contributes to its success.

It is a strategic response to rising food inflationand a clever use of psychological pricing, Michael Zakkour, founder of management consultancy 5 New Digital, told Quartz.

“Consumers respond well to clear, concise and easy-to-understand prices,” Zakkour said.

He argues that this clear value proposition is comparable to Subway’s successful $5 footlong campaign (although those days are long gone). Since everything is now more expensivethe $5 meal helps relieve the burden on the grocery store”Sticker Shock“ and the financial burden of restaurant visits.

“We can drive less, we can take fewer vacations, we can do without our handbags, but we cannot do without food,” said Zakkour. The majority of McDonald’s customers are middle-income workers, those who earn between 48,000 to 65,000 US dollars annually.

The $5 menu offer was created to “lure people in” in the hope that they spend more from Improving your meals or Eating with otherssaid Bob Vergidis, chief vision officer at technology platform The Point of Sale Cloud.

“The deal signals that consumers are price conscious,” he said. It also reflects the “cyclical” nature of such Promotionswhich can reveal Pressure that restaurants face. Competitors such as Wendy’s, Taco Belland even Arby’s have launched similar agreements in response.

Kristin Lynch, senior director of strategy and analytics at Paytronix, a software development company, told Quartz that while the deal could boost short-term traffic, it could also raise expectations for constant discounts And Promotions.

“McDonald’s needs to consider the value of its loyalty program,” warns Lynch. With 166 million members representing 25% of systemwide sales, maintaining value while meeting customer expectations is critical.

So far, McDonald’s has “read the mood in the room,” said Zakkour of 5 Digital. At a time when Fast food prices have skyrocketed and become a luxury item. The $5 menu serves as a “welcome back” message and reminds customers of the lasting value.

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