McDonald’s Begins McDiscount Era With Lower Prices

The Golden Arches Strike Back Against Inflation Critics

McDonald’s has finally heard the complaints loud and clear. After months of social media fury over expensive Big Mac combos and declining customer visits, the fast-food giant is launching a full-scale price war. McDonald’s latest attempt to bring back cost-conscious customers rolls out Monday with a slate of new deals. The move represents a dramatic shift for a company that saw U.S. same-store sales fell 3.6%, the largest three-month drop since Q2 2020, when they plunged 8.7%.

This isn’t just another marketing campaign. It’s McDonald’s acknowledgment that something fundamental has broken in their relationship with customers. Value-minded consumers are “too often” seeing combination meals that cost more than $10 and that is “shaping value perceptions in a negative way,” Kempczinski admitted earlier this month. The company that built its empire on affordable food has been forced to confront a harsh reality: they’ve priced themselves out of reach for their core customers.

The $18 Big Mac That Started It All

Photos of eye-watering menu prices at some McDonald’s locations – including an $18 Big Mac combo at a Connecticut rest stop from July 2023 – went viral, bringing diners’ long-simmering frustrations to a boiling point that the company couldn’t ignore. That single photograph became the symbol of everything wrong with fast-food inflation. McDonald’s executives scrambled to respond, with President Joe Erlinger writing that “it frustrates and worries me, and many of our franchisees, when I hear about an $18 Big Mac meal being sold – even if it was at one location in the U.S. out of more than 13,700.”

The damage was already done. Social media exploded with outrage, and customers began sharing their own horror stories of inflated McDonald’s prices. More worrying, though, is when people believe that this is the rule and not the exception, or when folks start to suggest that the prices of a Big Mac have risen 100% since 2019. McDonald’s found itself fighting a perception battle it was losing badly.

McValue Takes Center Stage in 2025

New, everyday value menu will be available nationwide starting Jan. 7, featuring more fan-favorite items and even more ways to save through McDonald’s ambitious McValue platform. This isn’t just rebranding their existing deals – it’s a comprehensive overhaul of how the company approaches pricing. Fans can mix and match with the new Buy One, Add One for $1* offer and fuel up for less with the popular $5 Meal Deal**.

The new platform extends beyond simple meal deals. Plus, we’re dropping even more offers in the App courtesy of McValue – including free medium fries with a $1 purchase every Friday in 2025 and a free McCrispy chicken sandwich for new App users. McDonald’s is essentially admitting that their previous pricing strategy alienated customers and they need dramatic action to win them back.

Extra Value Meals Make Their Comeback

Starting Monday, the fast-food giant is bringing back its Extra Value Meals, which were last promoted before the Covid-19 pandemic. The timing isn’t coincidental – these meals disappeared just as inflation began its relentless march upward. Customers will save 15% on the combo meals compared with buying the entree, fries and a drink separately, the company said.

In order to curb this practice and make the selected menu items affordable, McDonald’s has agreed to subsidize any franchise that loses money as a result of the price drop. This unprecedented move shows how seriously McDonald’s is taking the affordability crisis. It’s basically McDonald’s way of making sure that all of its locations agree to offer the same price discounts.

The Traffic Disaster That Changed Everything

The numbers tell a sobering story about McDonald’s recent struggles. McDonald’s U.S. recent traffic from low-income consumers declined by almost double-digits, and middle-income consumer traffic fell by nearly as much, CEO Chris Kempczinski said in a Thursday earnings call. These aren’t small dips – they represent a massive exodus of McDonald’s traditional customer base.

Placer.ai’s data revealed McDonald’s overall foot traffic was down 2.6% compared to the same period in the previous year, when its foot traffic increased by 0.1%. The contrast is stark: while other industries recovered from pandemic lows, McDonald’s was losing ground. On the company’s first quarter earnings call Thursday, Kempczinski said that “geopolitical tensions dampened consumer sentiment more than we expected.” He said that traffic was particularly weak among lower-income consumers, approaching a decline of 10%.

The Reality Behind Big Mac Pricing

McDonald’s finally came clean about their actual pricing in response to mounting criticism. In an open letter to its customers, McDonald’s USA President Joe Erlinger said that the average price of a Big Mac in the U.S. is $5.29, an increase of 21% since 2019. While twenty-one percent sounds reasonable compared to overall inflation, it still represents a significant burden for cash-strapped customers.

The McChicken sandwich saw the greatest price increase, significantly increasing in price, with some locations reporting prices as high as $2.99 in 2024. These dramatic increases across the menu created a perception that McDonald’s had abandoned its value roots entirely. In a praiseworthy moment of candor, the company even tucked into the presentation that the average price of menu items is up about 40% since 2019, a disclosure that reporters quickly seized upon.

CEO Admits the Obvious About Affordability

“The single biggest driver of what shapes a consumer’s overall perception of McDonald’s value is the menu board,” Kempczinski told analysts on McDonald’s earnings call. This admission reveals how disconnected leadership had become from customer reality. When people drive up to McDonald’s and see prices that shock them, all the corporate explanations about inflation and supply chain costs become irrelevant.

“I think what you’re going to see as you head into 2024 is probably more attention to what I would describe as affordability,” CEO Chris Kempczinski said on the earnings call Monday. The fact that affordability required special attention shows how far McDonald’s had drifted from its core promise of cheap, quick food.

The $5 Meal Deal Success Story

McDonald’s $5 value meal debuted last year and stabilized sales, at least temporarily, after the company bet correctly that customers were in search of combinations that stretched their dollars. The success of this single offering proved that customers hadn’t abandoned McDonald’s – they just couldn’t afford it anymore. With more than 20 million redemptions so far this year, this is a fan-favorite and will remain available Every. Single. Friday. through the end of 2024

The meal deal’s popularity forced McDonald’s to extend it repeatedly. It’s official – the $5 Meal Deal is sticking around, with a majority of local markets extending it into December. What started as a temporary promotion became a lifeline for maintaining customer relationships during a pricing crisis.

Franchisees Feel the Heat

Local McDonald’s owners found themselves caught between corporate pressure and customer anger. Part of the reason why there’s such a big disparity between prices at different McDonald’s locations is that each franchisee sets its own rates. This system created wildly different experiences for customers, with some locations charging reasonable prices while others became poster children for fast-food inflation.

“As local small business owners, my fellow franchisees and I are always listening to what our customers want from their neighborhood McDonald’s,” said Cory Watson, McDonald’s Owner/Operator and National Value Chair for 2025. “No matter the city or the state, they’re telling us how important it is for them to find their favorite meals at affordable prices.” The quote reveals how franchisees were hearing customer complaints directly while corporate headquarters seemed slower to respond.

Competition and Market Share Wars

Raymond James said in an analyst note that it expects the deals to “move the needle and to likely be felt across the restaurant industry” given McDonald’s dominance, perhaps setting off another wave of deals among its competitors. McDonald’s isn’t fighting this battle alone – the entire fast-food industry is struggling with the same affordability crisis.

Chipotle, Domino’s, Pizza Hut, Shake Shack and Starbucks all saw slowing or declining sales in their quarter, with many citing particular weakness among lower-income consumers. The widespread nature of these challenges suggests that customers have fundamentally changed their dining habits in response to inflation across the restaurant industry.

The Path Forward With Strategic Pricing

The new meals are meant to reach the customers who are not already using McDonald’s mobile app for deals or buying the chain’s existing value menu items, CEO Chris Kempczinski said on CNBC’s “Squawk Box” on Tuesday morning. That’s roughly half of the chain’s customer base. This statistic reveals a crucial insight: McDonald’s had been offering deals, but only to a select group of tech-savvy customers willing to use their app.

“While we may adjust our current value offerings over time, for the remainder of 2025 we’ll continue to include everyday Value Meal deals starting at $5, given how the current $5 meal deal – in particular – has resonated with customers,” Borden said. The commitment extends through the entire year, signaling that McDonald’s recognizes this isn’t a temporary problem requiring a temporary solution.

Economic Reality Hits the Golden Arches

“Consumers today are grappling with uncertainty,” McDonald’s Chairman and CEO Chris Kempczinski said in a statement, as the chain cited lower guest counts. The language is careful and corporate, but it acknowledges what customers have been saying for months – they simply can’t afford to eat out as frequently as they once did.

The fast-food giant’s U.S. same-store sales fell 3.6% due to falling traffic, despite its value offerings, as consumers are “grappling with economic uncertainty.” Even with various discount programs already in place, McDonald’s couldn’t stop the customer exodus. The McDiscount era represents their most aggressive response yet to this crisis, with lower prices across the board rather than isolated promotional deals.

McDonald’s journey from inflation villain to discount champion reflects broader changes in American consumer behavior. The company that once symbolized affordable convenience pricing itself out of reach for millions of customers, only to discover that no amount of marketing could substitute for genuinely low prices. Whether this new McDiscount era can restore the Golden Arches to their former glory remains to be seen, but one thing is certain: McDonald’s has learned that in the battle for customer loyalty, affordability always wins.