McDonalds on Santa Monica Blvd in Los Angeles, California on April 1, 2024.
Robert Gauthier | Los Angeles Times | Getty Images
McDonald’s is working to bring the value meal to U.S. stores to assist offset an increasingly challenging consumer environment, two people familiar with the matter told CNBC.
Respondents said a $5 meal could consist of four items: a McChicken or McDouble, four-piece chicken nuggets, fries, and a drink. It was a valuable meal first reported by Bloomberg News.
The potential up-to-date offering comes as low-income consumers begin to pull back on spending, particularly on speedy food brands. Mentions of low-income consumers on company earnings calls are at their highest level in almost two years, according to data from Bank of America. Executives from McDonald’s to Wendy Down Dave and Buster everyone noticed the reduction in expenses.
McDonald’s recently reported a mixed first quarter, with U.S. same-store sales falling slightly miniature of expectations. Higher prices helped escalate the average number of checks, but some consumers pulled out because of the higher costs.
“Consumers continue to be even more discriminated against for every dollar they spend as everyday spending faces higher prices, putting pressure on [quick-service restaurant] industry,” CEO Chris Kempczinski said on the company’s April 30 earnings call.
He added that McDonald’s needs to have a “laser focus” on affordability to attract customers.
During the call, Kempczinski said the company is working on a nationwide value transaction in the U.S., and the company’s CFO Ian Borden said the U.S. leadership team is working closely with owner-operators in this environment. McDonald’s corporations and franchisees, who run 95% of McDonald’s locations and have influence over such offers, often disagree on promotions that can eat into owners’ profits.
McDonald’s initial proposal for a $5 meal did not clear the necessary hurdles, and additional details are currently being discussed, according to a person familiar with the process. – said the second person Coca cola added marketing funds to the equation to make the deal more attractive.
McDonald’s and Coca-Cola declined to comment to CNBC.
— CNBC’s Amelia Lucas contributed to this article.
