Fast food chains are launching a ‘value menu’ war after complaints about costs. Will it last?

Millions of American families are hitting the road to start their summer vacation, and ordering food on the go tends to be commonplace. This couldn’t come at a better time. Fast food restaurants are in the middle of a budget war, offering promotions to lure customers to their restaurants despite inflation concerns and a rising minimum wage in California and other states.

Starting June 25, McDonald’s will offer a month-long deal that includes a combo meal — either a McChicken, a McDouble or four-piece chicken nuggets, small fries and a small drink — for $5.

After McDonald’s announcement last month, other fast food restaurants followed suit. Wendy’s announced its limited-time $3 Breakfast Combo and Burger King trumpeted that it plans to bring back its $5 Meal Your Way.

Additionally, fast food mobile apps continue to offer deep discounts.

Application relief

Recently, a Big Mac with medium fries and a medium drink cost $11.79 before tax at a McDonald’s in Santa Ana, California. This same meal ordered via a mobile application to be picked up at the same location costs $6.50 before taxes, a savings of $5.29.

But prices and offers tend to vary depending on the user.

Customers started complaining on Reddit about the McDonald’s mobile app. Some say deals decrease with usage. Others say their friends or partners got a better deal on the app than they did. A few mentioned that they could find better deals by simply walking in and ordering from their local McDonald’s.

The plethora of promotional offers comes after diners criticized fast food companies on social media earlier this year for rising prices.

In response, Joe Erlinger, president of McDonald’s USA, said in an open letter last month that the average price of McDonald’s menu items has increased by about 40% since 2019.

“Recently, we have seen viral social media posts and poorly sourced reports that McDonald’s has raised prices well beyond inflation rates. This is inaccurate,” Erlinger wrote.

“The average price of a Big Mac in the United States was $4.39 in 2019,” he said. “Despite a global pandemic and a historic rise in supply chain costs, wages and other inflationary pressures in the years since, the average cost is now $5.29. This represents an increase of 21% (not 100%),” as unsubstantiated claims on social media claim.

Quick-service restaurants said the increases were a response to rising inflation and labor costs — in part because of minimum wage increases not only in California but across the country.

It’s true that quick-service restaurants such as McDonald’s have faced increased costs, but they’re not suffering in any way, said Shubhranshu Singh, an associate professor at Johns Hopkins University who specializes in marketing. fast service.

“They don’t struggle,” Singh said. “Inflation is increasing. Wage rates are increasing. But McDonald’s profits are also increasing.”

McDonald’s global comparable sales rose nearly 2% in the first quarter of the year, according to the latest statistics released by the company. The fast food giant described the profit increase as having “benefited from average check growth driven by strategic menu price increases.”

Price-weary diners took notice and grew tired of price hikes, choosing to eat less fast food and protesting on social media that their budget-friendly meals of choice were no longer wallet-friendly , said Singh.

Several diners took aim at McDonald’s, complaining on TikTok that the company was charging more for food that was supposed to be affordable.

“That’s $3 worth of food,” said one customer holding up a hash brown. “Something doesn’t seem right here.” »

“McDonald’s has become too arrogant,” said another customer. “You’re not supposed to be expensive.”

One customer called it “absurd” that she paid $4.59 for an average order of fries.

And then there was the uproar over a Connecticut McDonald’s charging $18 for a Big Mac combo meal. The photo sparked a national debate over soaring fast food prices.

To make choices

Most McDonald’s in the United States are independently franchised, so prices vary depending on where you go.

Rising fast food prices ultimately led to slower-than-expected sales at various quick-service restaurants, such as McDonald’s, Starbucks and Pizza Hut.

“Consumers are always making choices,” said Sara Senatore, a restaurant analyst at Bank of America. “When the value proposition starts to diminish, consumers will make other choices.”

Until recently, consumers were willing to pay more for quick-service meals. When fast food prices started skyrocketing in 2022, consumers simply followed because prices had soared everywhere due to inflation, Senatore said.

But today, inflation has fallen. Food prices have fallen and budget-conscious consumers may no longer view fast food as a clearly affordable choice, she said.

Enter the meal value.

Budget meals are nothing new. In the 1980s, McDonald’s, Wendy’s and Burger King embarked on a series of advertising campaigns known as the Burger Wars, competing for customers in the then-burgeoning fast food market.

“The hope is that the consumer will go there and maybe buy something besides the value meal and then want to come back even if there’s no deal,” Singh said.

But promotions, analysts warn, can’t last forever.

“It’s not sustainable,” Singh said. “I don’t expect any of these deals to last.”

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