Hit with falling sales, McDonald's extends popular $5 meal deal, eyes big new burger
McDonald's reported a decline in sales for the first time in more than three years, but the home of the Big Mac has a strategy for serving up growth going forward, including the development of a brand new burger.
Deal-conscious consumers staying away contributed to a 1% decline in global sales for the fast food giant during the April-to-June 2024 period, the company reported Monday. Sales in the U.S. fell 0.7%, while international sales fell 1.1%, the company said. Profit fell 12%.
In response to customers concerned about the increased cost of fast food, McDonald's began offering a limited-time $5 meal deal in June. It came with a McDouble or McChicken sandwich, a four-piece order of Chicken McNuggets, small fries and a small soft drink.
Now the chain plans to keep the $5 meal deal around longer than planned and may soon be enticing customers with one of its biggest burgers yet.
Here's what to know.
$5 meal deal sales exceed expectations
Sales of McDonald's $5 meal deal have been above expectations, with response from lower-income customers – those hit hardest by increased food prices – helping shift "sentiment towards the brand around value and affordability," McDonald's USA President Joseph Erlinger said Monday during a call about the company's quarterly financial performance, according to a transcript from S&P Global Market Intelligence.
McDonald's now plans to keep the $5 meal deal around longer. Most of its U.S. restaurants (93%) will have the deal on the menu into August, and the company is working to extend the deal even longer, Erlinger said.
That value meal strategy also has been adopted by competitors such as Burger King, Taco Bell and Wendy's.
McDonald's testing new burger
Another tactic to boost sales: McDonald's is testing a new "more satiating burger," McDonald's chairman and CEO Chris Kempczinski said Monday. Called the Big Arch, the sandwich is currently being sold in select restaurants in three international markets including Canada.
The Big Arch has two beef patties, three slices of melted cheese, crispy onions, slivered onions, pickles, lettuce, and a new "tangy McDonald's sauce," Kempczinski said. The company plans to test it through the end of 2024 before offering it in more markets, he said.
Good news for McCrispy chicken sandwich fans
McDonald's is also expanding the availability of its McCrispy chicken sandwich to more markets.
It also plans to continue rewarding members of its MyMcDonald's Rewards loyalty program, like with its ongoing deal for a free medium order of fries on Fridays with any purchase of $1 or more – a deal that runs through Dec. 27.
"As consumers are more discriminating with their spend(ing), we are focused on the outstanding execution of delivering reliable, everyday value and accelerating strategic growth drivers like chicken and loyalty,” Kempczinski said.
Contributing: Reuters.
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