McDonald’s reveals its new value menu

McDonald’s Corp. on Monday revealed its newest weapon in the quick-service value battle: a tiered value menu with items ranging from $1 to $3.

The $1 $2 $3 Dollar Menu is the Oak Brook, Ill.-based company's latest effort to find a successor to the Dollar Menu it had used for years to generate market share and vanquish its competitors. The new menu will be available nationwide on Jan. 4.

For $1, consumers can get any size soft drink, a sausage burrito, McChicken or cheeseburger.

The $2 menu items will include Sausage McGriddles, two-piece Buttermilk Crispy Tenders, a Bacon McDouble or a small McCafe beverage.

For $3, customers can get a Sausage McMuffin with Egg, Classic Chicken Sandwich, Triple Cheeseburger or Happy Meal.

This is the first time McDonald’s has offered a Happy Meal on its national value menu.

That menu also includes a new item in the Classic Chicken Sandwich, which features a buttermilk crispy chicken fillet on a toasted bun with pickles and the chain’s Signature Sauce released earlier this year.

“We built this new menu with variety and value firmly in mind,” Chris Kempczinski, president of McDonald’s USA, said in a statement.

McDonald’s effort comes as fast-food chains have increasingly used value to lure customers amid a highly competitive environment—echoing a value battle from early 2016 that included McDonald’s previous value offer, a series of McPick menus offering customers two items for a set discounted price.

Chains such as Yum Brands Inc.’s KFC and Taco Bell, as well as Hardee’s and Carl’s Jr. owner CKE Restaurants Inc., have been offering bundled meals for $5. Sonic Corp. is offering a $3.99 Double Feature that includes a cheeseburger and a small shake. Burger King offered two Whopper sandwiches for $6. The Wendy’s Co., meanwhile, has continued the 4 for $4 value menu it started in 2015.

Jack in the Box is also getting in on the act. In January, the chain plans to start offering either single or bundled products at prices from $1 to $5, Jack in the Box Inc. CEO Lenny Comma said on the company’s earnings call last month.

“We don’t want to be in a position where we’re reacting after the fact,” CFO Jerry Rebel said on the call.

Companies frequently start their value offers in January, after the holidays, when business is slowest and when consumers are feeling tighter budgets following holiday spending. Still, the value push comes as franchisees face skyrocketing labor costs from higher minimum wages and competition for workers.

Still, for McDonald’s, the value menu is part of a broader program to push its U.S. business forward. McDonald’s has rapidly expanded delivery through its partnership with UberEats; it started curbside service and is remodeling many restaurants with its Experience of the Future design, which features self-order kiosks.

The company also started serving breakfast all day and a semicustomizable selection of Signature Crafted sandwiches. It also reshaped its McCafe brand and next year is planning to start serving Quarter Pounders that are made to order with fresh beef.

All these efforts have helped the chain generate stronger same-store sales, including 4.1% in the U.S. in the quarter ended Sept. 30. And investors have been thrilled with the results: The stock is up more than 41% so far this year.

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