• Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock
Stock

McDonald’s says $5 value meal sales are hot as consumers feel ‘pinch’ of inflation

by July 30, 2024
written by July 30, 2024

McDonald’s ‘$5 Meal Deal’ appears to be bringing back bargain-hungry customers amid broadly higher post-pandemic food prices.

The fast-food giant reported profit and sales Monday that missed analysts’ expectations, acknowledging an industrywide slowdown as consumers eat at home more often and trade down to cheaper items.

And while McDonald’s reputation as a lower-cost option continues to put it at an advantage, it is a shrinking one.

‘Consumers still recognize us as the value leader versus our key competitors, but it’s clear that our value leadership gap has recently shrunk,’ CEO Chris Kempczinski said on an earnings call Monday.

Since the onset of the pandemic in the spring of 2020, overall food prices in the U.S. economy have climbed about 24%, according to the Bureau of Labor Statistics, with food-away-from-home costs surging 27% as restaurants faced higher labor and supply costs.

While McDonald’s weathered the resulting consumer environment as well as anyone, it began to see worsening results more recently as customers’ post-pandemic spending boom waned.

Enter McDonald’s $5 Meal Deal, which includes a McChicken or a McDouble (a double burger with one slice of cheese), a four-piece McNuggets serving, fries and a drink.

Launched in late June — largely before its impact could be reported in the company’s latest earnings report — the offering showed immediate results and was being extended at least through August in most U.S. markets.

‘We’ve seen a lot of enthusiasm, and the number of $5 Meal Deals sold are above expectations,’ McDonald’s U.S. President Joe Erlinger said on the call. While the combo was proving most popular among lower-income consumers, executives said average checks that include the deal have been over $10, which he said showed consumers are using it as an add-on to regular orders.

And from a brand-improvement perspective, Erlinger said, the offering had begun to reset the chain’s perception for value and affordability.

McDonald’s shares rose more than 3% Monday morning.

Companies across the U.S. economy are offering summer discounts to keep consumers spending — a strategy that appears to be working. Amazon just set a Prime Day spending record, and Salesforce tracking of online spending across retailers other than Amazon showed U.S. sales grew 3% as discounts jumped 10% since Prime Day last year.

“You have a heightened level of promotion, heightened levels of discounts, and that makes for a perfect storm where the consumer feels like ‘this is a really great opportunity for me to buy. I’m excited about spending,’” Vivek Pandya, Adobe’s lead insights analyst, told NBC News last week.

Even as inflation has cooled, signs of a struggling consumer continue to mount: According to Philadelphia Federal Reserve data, balance-based credit card delinquency rates were at their highest level in nearly 12 years as of the first quarter this year, though the total number of credit card accounts past due by 30, 60, and 90 days actually declined.

McDonald’s leadership acknowledged that despite the success of its new offering, it still faces an uphill battle as consumers continue to pull back.

‘At the end of the day, we expect customers will continue to feel the pinch of the economy and a higher cost of living for at least the next several quarters in this very competitive landscape,’ Erlinger said.

CNBC’s Kate Rogers and Robert Hum contributed to this article.

This post appeared first on NBC NEWS
0 comment
0
FacebookTwitterPinterestEmail

previous post
London Stock Market Today – Why Is FTSE 100 Declining?
next post
White House website praises lifetime Supreme Court appointments as Biden pushes term limits

related articles

Nike pushes back Skims launch with Kim Kardashian...

June 19, 2025

DOJ seizes record $225 million in crypto tied...

June 19, 2025

Amazon expects to cut corporate jobs as it...

June 18, 2025

Streaming overtakes cable and broadcast as the most-watched...

June 18, 2025

Kraft Heinz to remove artificial dyes from U.S....

June 17, 2025

Trump-branded wireless service launches — with a gold...

June 17, 2025

Meta is finally bringing ads to WhatsApp

June 17, 2025

Starbucks moves to the next phase in its...

June 17, 2025

Trump made millions on guitars, Bibles and watches...

June 16, 2025

Anne Wojcicki to buy back 23andMe and its...

June 16, 2025
Enter Your Information Below To Receive Free Trading Ideas, Latest News, And Articles.


Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest News

  • Former VP Harris reportedly asking Hillary Clinton for advice on what to do after losing to Trump

    January 23, 2025
  • Inside how podcasters moved the voting needle with young men ahead of Trump’s massive win

    November 29, 2024
  • USAID’s green energy programs have maximized harm to the developing world, according to former official

    February 13, 2025
  • Trump inauguration will reportedly include Muslim cleric who refused to condemn Hezbollah as terror org

    January 15, 2025
  • Ethereum is struggling with support this week

    August 21, 2024

Popular Posts

  • 1

    Secret Service admits leaning on ‘state and local partners’ after claim it ignored Trump team’s past requests

    July 21, 2024
  • 2

    Elon and Vivek should tackle US funding for this boondoogle organization and score a multimillion dollar win

    December 4, 2024
  • 3

    Forex Profit Calculator: Maximize Your Trading Potential

    July 10, 2024
  • 4

    Five more House Democrats call on Biden to drop out, third US senator

    July 19, 2024
  • 5

    Biden calls to ‘lower the temperature’ then bashes Trump in NAACP speech

    July 17, 2024

Categories

  • Economy (829)
  • Editor's Pick (5,005)
  • Investing (634)
  • Stock (809)

Latest Posts

  • Top 5 moments from Night 2 at the Republican National Convention

    July 17, 2024
  • Vitesse Energy stock: How safe is the 9% dividend yield?

    August 12, 2024
  • EURAUD and EURNZD: EURNZD is rising to a two-month high

    July 16, 2024

Recent Posts

  • Israeli prime minister lauds Trump’s leadership when asked if Biden should take credit for ceasefire

    February 5, 2025
  • Dollar Tree says it’s winning over higher-income shoppers and may offset tariffs with price hikes

    March 27, 2025
  • USDCHF and USDJPY: USDCHF is testing September support

    September 30, 2024

Editor’s Pick

  • Hegseth says he and Vance are ‘on the same page’ despite VP’s remark on US troops in Ukraine

    February 14, 2025
  • Putin says Trump plans for Greenland ‘has nothing to do’ with Russia

    March 28, 2025
  • Trump says he’ll drop sanctions on Syria in move to normalize relations

    May 13, 2025
  • About us
  • Contacts
  • Privacy Policy
  • Terms & Conditions

Disclaimer: moneyrisetoday.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2025 moneyrisetoday.com | All Rights Reserved

Money Rise Today – Investing and Stock News
  • Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock