After experiencing a rare drop in store sales and a decline in lower-income customers earlier this year, McDonald’s removed a $5 meal deal from its program in late June and offered it nationwide. The promotion initially increased customer traffic and sales, and the chain continued the offer through August.
And the brand’s momentum continued, too: According to Numerator, 70 percent of McDonald’s customers said they ate at the chain in part because of the deal, while 58 percent said they chose McDonald’s over other fast-food chains because of the deal.
The chain likes what it sees so much that it’s extending the $5 meal deal even further, announcing today that the majority of its domestic markets will offer the promotion through December.
“This summer, tens of millions of fans went to their local McDonald’s to enjoy our $5 Menu Offer, and it was so great to welcome them,” U.S. President Joe Erlinger said in a statement. “Together with our franchisees, we are committed to keeping our prices as affordable as possible, which is why we’re offering even more ways to save. Whether you’re stopping by for breakfast, lunch, dinner or a late-night snack, we want everyone to find the food they love at a price that’s just right. The extension of the $5 Menu Offer and the other offers we’re announcing for our fall lineup are just a few of the ways we’re working hard to provide great meals at a fair price.”
These “other offers” include:
- 50-cent double cheeseburger on National Cheeseburger Day, September 18
- McCrispy chicken sandwich for $2 on National Fried Chicken Sandwich Day, November 9
- 10 Chicken McNuggets for $1 between November 4th and December 2nd, valid once a week only via the app.
- Free Fries Fridays – a free medium order of French fries with any minimum purchase of $1. The company said this offer has resulted in more than 20 million redemptions so far this year and will continue every Friday through the end of 2024.
McDonald’s notes that local franchisees also have their own offers, including a special promotion in Southern California that offers two servings of a choice of a Chicken or Sausage McGriddle, a Sausage Biscuit or iced coffee of any size, or 20 Dallas McNuggets for $5 for $3.99.
This advertising concept has cheered up some analysts. In a note published earlier this week, Evercore ISI analyst David Palmer said the chain’s sales trend had turned positive.
“As we look ahead to the fourth quarter, we believe McDonald’s value menu and incremental product innovations with promotional investments will drive continued market share gains. We believe the McDonald’s system is more consistent than it was just a few months ago, and service metrics are improving, along with marketing and value,” he wrote.
In addition, analysts at Jefferies predict that McDonald’s will return to positive sales in its existing stores by the fourth quarter.
“We believe a greater focus on value (marketing) is proving more meaningful and driving more traffic faster than expected,” Jefferies wrote in a note this week. McDonald’s marketing prowess, the company added, combined with value-based promotions and improvements in food quality and delivery, positions the company well in a competitive and promotional environment.
The extension of McDonald’s $5 meal deal into December will likely force other quick-service restaurant chains to maintain some sort of competitive promotion, though few are as well prepared to withstand potential margin pressure.
Contact Alicia Kelso at (email protected)
