McDonald's Sales Slump Means The $5 Meal Deal Is Here To Stay: Drive-Thru Diary

It turns out bad news for McDonald's means good news for consumers.

The fast food giant last week reported that its U.S. sales fell last quarter by 0.7 percent. It marks the first sales decline for the company since 2020, when empty streets and deserted restaurants were the pandemic-era norm.

That grim milestone has led McDonald's to calm anxious investors that it's doing everything it can to woo back price-conscious consumers to its restaurants, especially amid competition that's growing fiercer as the summer goes on.

"We're taking a forensic approach to evaluating our offerings and acting with urgency and agility to implement solutions to deliver against customer expectations," McDonald's CFO Ian Borden said on Monday's earnings call.

Most immediately, McDonald's is scrambling to extend the life of its $5 meal deal. Introduced earlier this summer, the meal — which includes a sandwich, nuggets, fries and drink — was meant to last only four weeks.

But the ephemeral discount quickly took on the appearance of a paltry concession to consumers who were fed up by sky-high drive-thru prices — see the X thread that went viral with its McDonald's rest-stop menu board showing $18 combo meals.

Perhaps worse for McDonald's is that its competitors came out of the woodwork with appealing discount meals, forcing its hand to come up with a longer-term strategy.

Chili's boasts how its $11 burger combo comes with much more food than a Big Mac meal, which often costs around the same price.

And Jack in the Box, Burger King and Wendy's all responded to the McDonald's $5 promotion with similar deals that wouldn't disappear before the end of summer.

“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,” McDonald’s U.S. President Joe Erlinger said.

After last week's disappointing earnings report, McDonald's game plan looks like this: The $5 meal deal is here to stay, at least through August at the majority of restaurants, but executives say they're working to extend the promotion even longer.

It's also testing a new burger, the Big Arch, which the company calls a "more satiating burger" — take that Chili's.

And app users can expect more perks through its MyMcDonald's Rewards program, such as free fries on Fridays.