McDonald’s $5 meal hasn’t led to an increase in customers, fast food experts say.
Analyst Peter Saleh, whose firm BTIG tracks the number of visitors to fast-food chains, now thinks the company should review its strategy and extend the agreement.
“It is too early to tell whether this $5 Meal offer will drive more profitable traffic,” he said in a note to investors.
But he said the offer is intended to change Americans’ perception that McDonald’s is expensive, as well as to attract more customers.
He also expects the deal, which started on June 25, to be extended until September. This will give us more time to get the message across and we can better estimate the effect on the number of customers.
McDonald’s is known to be considering this extension. Even if they don’t extend it nationwide, local franchises are encouraged to do so.
McDonald’s deal went on sale for a month on June 25
And franchisees in areas such as Denver, Dallas, Phoenix and Las Vegas have already voted to renew it, McDonald’s President Joe Erlinger said in a recent interview.
Saleh, in the note seen by Seeking Alphaalso said he expects other McDonald’s promotions — including free fries on Fridays — to continue through the summer as competitors like Burger King and Wendy’s continue to roll out more offers.
McDonald’s The $5 offer – which includes a McChicken or McDouble, four pieces of chicken nuggets, fries and a drink – was rolled out to provide customers with “meaningful value”.
When news of the meal first broke in May, it was thought that not every restaurant would offer the deal, with restaurants with higher labor costs and rent declining.
But McDonald’s has found a solution. It gives managers in the more expensive states — Alaska, California, Guam, Hawaii, Nevada, Manhattan in New York and Washington — the option to charge $6.
The promotion would last about a month.
McDonald’s made a staggering profit of $14.5 billion last year.
Chains are suffering from declining customer numbers as Americans are tired of two years of price increases and are staying away, so they are coming up with new offers.
Burger King’s $5 Your Meal – which looks a lot like McDonald’s – was the first to appear in restaurants in June.
Customers can choose from one of three sandwiches – a Whopper Jr, a Bacon Cheeseburger or a Chicken Jr – plus four chicken nuggets, fries and a soft drink.
Wendy’s has a breakfast deal for $3 and also a four-course meal for $5, similar to McDonald’s and BK’s.
Starbucks also made a surprise entry into the value-for-money space with a coffee and breakfast combo starting at $5.
McDonald’s is desperately trying to combat the perception that its prices have increased so much that it no longer offers good value for money.
Last month, Joe Erlinger, president of McDonald’s USA, wrote a unique open letter to customers arguing that the price increases aren’t as bad as some media outlets are making them out to be.
In it, he said prices in the 14,000 US restaurants have “only” gone up 40 percent since the pandemic.
When contacted by DailyMail.com, McDonald’s said it was committed to providing customers with good value for money.
McDonald’s president Joe Erlinger has suggested the $5 meal deal could be extended
McDonald’s isn’t the only fast-food giant rolling out a deal. Chains — reeling from declining customer numbers as Americans get fed up with two years of price hikes and stay away — are rolling out promotions.
Burger King’s $5 Your Meal – which looks a lot like McDonald’s – was the first to appear in restaurants in June.
Customers can choose from one of three sandwiches – a Whopper Jr, a Bacon Cheeseburger or a Chicken Jr – plus four chicken nuggets, fries and a soft drink.
Wendy’s has a breakfast deal for $3 and also a four-course meal for $5, similar to McDonald’s and BK’s.
Starbucks also made a surprise entry into the value-for-money space with a coffee and breakfast combo starting at $5.
