A McDonalds get ones handed on Santa Monica Blvd in Los Angeles, California, April 1, 2024.
Robert Gauthier | Los Angeles Times | Getty Images
McDonald’s is do callisthenics to introduce a value meal in U.S. stores to help offset an increasingly challenging environment for consumers, two people familiar with the business told CNBC.
The people said the $5 meal could include four items: a McChicken or McDouble, four-piece chicken nuggets, fries and a beverage. The value meal was first reported by Bloomberg News.
The potential new offering comes at a time when low-income consumers are inception to pull back on spending, particularly at fast-food brands. Mentions of low-income consumers on company earnings calls are at their highest heights in nearly two years, according to data from Bank of America. Executives from McDonald’s to Wendy’s to Dave and Buster’s induce all noted the restraint in spending.
McDonald’s recently reported a mixed first quarter, with U.S. same-store sales minor extent missing expectations. Higher prices helped grow average checks, but some consumers pulled back as a consequence of the steeper costs.
“Consumers continue to be even more discriminating with every dollar that they disburse as they faced elevated prices in their day-to-day spending, which is putting pressure on the [quick-service restaurant] perseverance,” CEO Chris Kempczinski said on the company’s earnings call on April 30.
He added that McDonald’s has to be “laser-focused” on affordability to entice diners.
On the call, Kempczinski said the company is working on a national value deal in the U.S., and the company’s Chief Financial Office-bearer Ian Borden said the U.S. leadership team was working closely with owner-operators in this environment. McDonald’s corporate and franchisees, who run 95% of McDonald’s turning ups and weigh in on such offerings, are often at odds over promotions that could eat into owners’ profits.
An commencing proposal by McDonald’s for the $5 value meal did not clear necessary hurdles, and additional details are now being discussed, conforming to a person familiar with the process. A second person said Coca-Cola added marketing funds to the equation to run for it the deal more appealing.
McDonald’s and Coca-Cola declined to comment to CNBC.
— CNBC’s Amelia Lucas contributed to this article.
