McDonald’s started a war against its fast-food competition that could change everything

Jun 26, 2024

Fast food chains are getting pummeled in the media and by consumers for high prices.

Now the industry is trying to make some big changes to stay afloat. 

And McDonald’s started a war against its fast-food competition that could change everything. 

A price war is breaking out in the fast-food industry 

The price of fast food has surged since the pandemic with some menu items nearly doubling in price. 

Fast food has gone from being a quick meal at an affordable price to being a luxury for many inflation-weary consumers.

McDonald’s was on the defensive after a picture went viral on social media of an $18 Big Mac value meal in Connecticut.

That’s why McDonald’s U.S. President Joe Erlinger was forced to issue a statement calling that price “an exception.”

Fast food chains are losing customers over high prices and know they’ve lost their value.

“Consumers continue to be even more discriminating with every dollar that they spend as they faced elevated prices in their day-to-day spending,” McDonald’s CEO Chris Kempczinski said on an April earnings call.

That’s why McDonald’s is going on the offensive with a limited-time $5 value meal until the end of July to win back cash-strapped consumers.

The $5 value meal includes a McDouble or McChicken sandwich, small fries, four-piece McNuggets, and a small fountain drink.

“We’re committed to winning the value war,” Erlinger told Bloomberg News.

The other major players in the fast food industry have already entered the price war.

Burger King beat McDonald’s to the punch with a promotion that will last all summer.

They launched the $5 Your Way Meal deal that lets customers pick between a Whopper Jr., Bacon Cheeseburger, or Chicken Jr., fries, four-piece chicken nuggets, and a fountain drink.

“Burger King is accelerating its value offers after three quarters of leading the industry in value traffic,” a Burger King spokesman said.

Wendy’s released a two-for-$3 breakfast promotion that includes seasoned potatoes and a choice of English muffin breakfast sandwiches.

Even Starbucks, which is known for its pricey lattes, released a new Pairings Menu that offered deals on select drinks and food.

Doubts exist about McDonald’s plan to win the price wars 

Erlinger thought that McDonald’s could beat its rivals in offering value-priced promotions because of its size and its marketing.

“Think about our scale,” Erlinger said.

McDonald’s franchisees – who run the majority of the chain’s locations – are skeptical about the $5 meal deal.

“There simply is not enough profit to discount 30% for this model to be sustainable,” an independent franchisee group said.

Fort Wayne, Indiana resident Dylan Covington cut back his McDonald’s visits to once every two to three months from once a week because of price increases.

“McDonald’s was always the cheap option,” Covington said. “Now it’s not even that. I don’t see a reason to go there unless I’m craving a Big Mac specifically.”

Now Covington goes to a local restaurant where he can find better value.

GlobalData managing director Neil Saunders told Axios that once the $5 promotion expires, McDonald’s issues will remain.

“McDonald’s $5 meal is sensible, but it will only be offered for a limited time so it will not resolve perceptions that the chain has become very expensive,” Saunders said. “Consumers remain squeezed and many of them can’t justify the high prices in fast food — which is supposed to be an inexpensive indulgence.”

Fast food customers will see some relief this summer as chains try to lure customers back in with discounts.

Read All About It will keep you up-to-date on any developments to this ongoing story.

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