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Can Extra Value Meals finally lift McDonald’s out of its traffic slump? The company—and many of its franchisees—are betting they can.
The fast-food giant lifted the veil from its plan to bring back the name traditionally given to its combo meals on Tuesday, saying that customers will find more “affordable pricing” on eight value meals starting Sept. 8.
The eight meals include the Big Mac, 10-piece Chicken McNuggets, any Quarter Pounder or any McCrispy, along with breakfast items the Sausage McMuffin with Egg, Egg McMuffin, Bacon, Egg and Cheese Biscuit and the Sausage, Egg and Cheese McGriddles.
The breakfast meals come with hash browns and coffee, the lunch and dinner meals come with fries and a drink. Franchisees have agreed to price those meals with a standard, 15% discount off the prices of the items individually.
McDonald’s is kicking the effort off by providing a nationwide discount on the medium Big Mac meal, at $8, and on the Sausage McMuffin with Egg, at $5. “Bringing back Extra Value Meals reflects the company and franchisees’ shared commitment to offering everyday affordable prices,” McDonald’s operator Danielle Marasco said in a statement.
McDonald’s is pushing Extra Value Meals because it has struggled with persistently weak traffic for about two years, and its year-long value push—notably the new McValue menu created in January—has not quite lifted the chain out of its traffic slump, as hoped.
“Value is in our DNA,” CEO Chris Kempczinski said in May. “But I’ll be the first to say that we had to take a step back and we had to recalibrate in 2024.”
McDonald's has had some success of late. The Minecraft Movie Meal helped the company generate its best U.S. result since early last year. The Snack Wrap also generated strong results.
Nevertheless, company executives last month began talking about more national price points and lower prices on everyday items. “We recognize that consumers’ value perceptions are most influenced by our core menu pricing,” Kempczinski said. “We’re working closely and collaboratively with our U.S. franchisees on this opportunity.”
That effort quickly focused on the combo meals, which can cost well over $11 in some markets. A rogue, $18 Big Mac combo meal at a Connecticut rest stop in 2023 went viral on social media and helped turn the chain into a lightning rod for criticism over fast-food prices.
Franchisees control pricing, which enables them to adjust to local market conditions such as labor or real estate costs. But that also results in wide price ranges, even within states. For instance, a medium Big Mac meal in Shinnston, West Virginia costs $8.79, according to Technomic Price Pulse data. That same meal costs 20% more, $10.59, in Shepherdstown, West Virginia, three hours away.
Franchisees already provide discounts of about 10% on average for their combo meals, according to a Restaurant Business analysis of Technomic Price Pulse data. On average, the new 15% discount standard will cut the cost of those combo meals by an average of about 50 cents, depending on the item and the existing discounts.
McDonald’s certainly has reason to believe this will work. The company typically gets traction from consumers when it pushes discounts, as it did with the Dollar Menu during the Great Recession. And many franchisees we’ve spoken with have said they believe this will be a big deal. One compared it with that aforementioned Dollar Menu.
But that doesn’t mean this isn’t a risk. The discounted prices on Extra Value Meals means it’s particularly important for the company to sell a lot more of them.
Unlike the Great Recession, not everybody is cutting back today. Many customers, in fact, are spending more. Despite McDonald’s traffic challenges, most customers are perfectly fine paying an average of $9.74 for a Big Mac meal. They’ll now get it for $8.
As such, the company will need to get a lot of customers to trade up to that meal from just a Big Mac. Or they’ll need a lot of customers to come in when they wouldn’t have come in otherwise, to make up for the money the chain and its franchisees are losing by lowering those prices.
McDonald’s and its franchisees are betting big that this happens. But we’re also one year into a value war and are still talking about the value perception of fast-food chains. Nothing is guaranteed right now.
UPDATE: This story has been updated to provide more clarity on McDonald's sales and traffic.
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