McDonald's $5 meal deal causing a "notable" bump in customers
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McDonald's $5 meal deal is driving traffic and sales for U.S. restaurants, which experienced a "notable" bump from the promotion, according to a memo obtained by Axios.
Why it matters: Restaurant chains have been under pressure to promote affordability and value to entice consumers to eat out instead of eating at home.
- Sonic Drive-In, Wendy's, Burger King, Jack in the Box, Starbucks and Taco Bell have promoted value offerings in recent weeks.
The big picture: McDonald's said the deal — which drove a 3% increase in guest counts — has been profitable in 96% of restaurants.
- The fast-food giant confirmed the majority of locations will extend the limited-time offer into August in a move to drive more consumers back.
- McDonald's experienced a "notable shift in guest counts" from the $5 meal deal, Myra Doria, national field president, and Tariq Hassan, chief marketing officer, wrote in the memo.
Zoom in: The average check for consumers getting the meal deal is over $10, Doria and Hassan said.
- The program is "far exceeding expectations" and seeing interest improve week over week with consumers with a household income below $45,000.
- "It's having a clear and essential impact on our business at a time when we can't afford to give an inch to the competition — and our competition will have a very hard time keeping up," Doria and Hassan said.
What's next: McDonald's officials said in an earnings call earlier this week that they are working on a new "everyday value and affordability platform."
- "We have a great lineup of exciting products and menu items coming this fall, but we must maintain our focus on value at the same time," McDonald's Doria and Hassan said.
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