After experiencing a rare same-store sales decline and erosion of lower-income consumer traffic earlier this year, McDonald’s pulled a $5 Meal Deal from its playbook and offered it nationwide in late June. The promotion generated initial traffic and sales lifts and so the chain continued the deal through August.
The brand’s momentum continued as well – according to Numerator, 70% of McDonald’s customers said they ate at the chain in part because of the deal, while 58% said they visited McDonald’s over other quick-service chains because of the deal.
The chain likes what it sees so much, it’s extending the $5 Meal Deal even longer, today announcing that a majority of its domestic markets will offer the promotion into December.
"This summer, tens of millions of fans went to their local McDonald's to enjoy our $5 Meal Deal, and it was so great to welcome them," U.S. president Joe Erlinger said in a statement. "Together with our franchisees, we're committed to keeping our prices as affordable as possible, which is why we're doubling down with 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 hits the spot. The extension of the $5 Meal Deal, and the other offerings we're announcing for our fall lineup, are just a few of the ways we're working hard to offer great meals at a fair price."
Those “other offerings” include:
- 50-cent Double Cheeseburgers on National Cheeseburger Day, Sept. 18
- $2 McCrispy chicken sandwich on National Fried Chicken Sandwich Day, Nov. 9
- $1 10-piece Chicken McNuggets between Nov. 4 and Dec. 2, valid once a week through the app only.
- Free Fries Fridays – a free medium order of fries with any $1 minimum purchase. The company said this offer has yielded 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 are also offering their own deals, including a Southern California promotion featuring two for $3.99 choice of a Chicken or Sausage McGriddle, Sausage Biscuit, or any-sized iced coffee, or Dallas’ $5 20-piece McNuggets.
This promotional playbook has perked up some analysts. In a note released earlier this week, Evercore ISI analyst David Palmer said the chain’s sales trends have turned positive.
"As we look to 4Q, we believe that McDonald’s value menu and incremental product news with advertising investments will lead to continued market share gains. We believe McDonald’s system is more unified than it was just a few months ago with service metrics improving alongside marketing and value," he wrote.
Additionally, Jefferies analysts project McDonald’s return to positive same-store sales by the fourth quarter.
"We think a greater focus on value (marketing) is starting to work more meaningfully and drive traffic sooner than expected," Jefferies wrote in a note this week. McDonald’s marketing prowess, the firm added, combined with value-oriented promotions and improvements in food quality and delivery, positions the company well in a competitive and promotional environment.
McDonald’s $5 Meal Deal extension into December will likely pressure other quick-service chains to maintain some type of competitive promotion as well, though few are as equipped to absorb potential margin pressures.
Contact Alicia Kelso at [email protected]
