During the Great Recession, the $1 price point became a major focal point in the restaurant industry’s value battle.
The economy was in the midst of its worst stretch in nearly a century. People were without jobs and many of those with jobs were not working as much as they’d wanted. And so restaurants pushed a lot of deals.
One of the biggest was the Dollar Menu, which McDonald’s used with great effect to lure customers in droves and distance it from competitors.
Other chains did something similar, and Burger King famously tried to price its own Double Cheeseburger at $1, to match McDonald’s, even though its version was more expensive and thus unprofitable for franchisees. That led to a legal fight that many of the chain’s longer-term operators still recall with disdain.
Fast-forward 17 years and the economy is split in two, with higher-end consumers spending as if nothing is wrong and the roughly half of the population with lower incomes cutting back.
Discounts these days are just as prevalent as they were back then, but that $1 price point has long left the realm of realism for the bulk of restaurant companies.
Food costs are far higher, particularly for beef. Wage rates are up. Delivery is a new thing that has influenced industry economics in ways we can’t imagine. And companies have tech fees, higher insurance rates and higher swipe fees. The average restaurant is less profitable than it was six years ago.
And so now we have a $3 menu, which Taco Bell introduced in January, and which McDonald’s plans to introduce in a couple of weeks.
Such menus are intriguing, because they can enable companies to take some of their lowest-priced items or, in Taco Bell’s case, create a few newer items, too, and cobble them together to show off their low-priced options.
Taco Bell’s menu has 10 items priced from $1.19 to $2.99. At McDonald’s, the $3 menu will feature items like a 4-piece Chicken McNuggets or, in the morning, a Sausage Biscuit.
How aggressive that McDonald’s menu is will depend on what is on it. A McChicken is a reasonable expectation, given that it is frequently priced at lower than $3. But in some markets that might require a discount.
Some of the discourse has termed the McDonald’s $3 menu as some sort of sign that we have entered a K-shaped economy. But the shape of that economy is hardly new. Restaurant chains, particularly McDonald’s and its CEO Chris Kempczinski, have been shouting about this from the rooftops for more than two years.
The value efforts started in early 2024 and accelerated by the middle of that year when McDonald’s introduced a $5 bundled deal.
Today, about three in 10 orders are on some sort of perceived discount, according to Circana. And in many respects the volume of offers exceed even those from the Great Recession.
Brands these days have loyalty programs and their various discounts, digital offers, delivery discounts to get customers’ attention on DoorDash, traditional broad-based value offers and old-fashioned paper coupons. If you can’t get a discount from a restaurant chain you just aren’t trying hard enough.
And yet traffic remains a broad-based problem for much of the industry. And things aren’t looking all that easier going forward, as gas prices and more economic uncertainty promise to make 2026 every bit as volatile as 2025 was.
Brands therefore have little choice but to keep playing with the offers they have on the table, which is why we now see two of the four biggest chains in the U.S. trying their hand at a $3 value menu. Because a lot of consumers still need it, and others could, too, with the way the economy is going.