McDonald’s will discount its combo meals starting in September. | Photo courtesy of McDonald’s.
McDonald’s doesn’t want its Big Mac combo meals to cost $18 anywhere.
The fast-food giant convinced franchisees to price combo meals at 15% lower than the prices of the items bought individually. It is also bringing back Extra Value Meals at $5 for breakfast and $8 on the Big Mac and Chicken McNuggets later this year, according to the Wall Street Journal.
Multiple sources confirmed the report to Restaurant Business. McDonald’s would not comment on the report.
McDonald’s is providing various sweeteners to convince operators to go along with the deal. The company will subsidize franchisees that lose money on the combos and the company and operators will spend to market the combo meals, according to the Journal.
The Chicago-based company is taking this step because it believes its core prices have risen too much, which is why traffic to the chain has struggled for the better part of the past two years.
Executives earlier this month revealed an effort to shift to more national price points, comments that surprised a lot of franchisees. Company executives presented the plan to operators in multiple meetings following the call.
“We recognize that consumers’ value perceptions are most influenced by our core menu pricing,” CEO Chris Kempczinski told analysts earlier this month. “We’re working closely and collaboratively with our U.S. franchisees on this opportunity, and we’re developing ideas for how we might address this as an entire system.”
The company has been worried about consumer reaction to its prices for well over a year. A report of an $18 Big Mac combo meal at a Connecticut rest stop helped fuel wild speculation about prices, to the point that the company took the rare step of publicizing national averages on its website last year.
With traffic falling, and sales going with it, the company kicked off a national value war last year, pricing McChicken and McNugget combo meals at $5, then instituting a comprehensive McValue menu, featuring national, digital and local value offers.
That value effort worked only to a point. Same-store sales rose 2.5% in the U.S. last quarter, but all that came thanks to a Minecraft Movie meal that was popular with consumers in early April. Much of the company’s earnings call was spent discussing concerns with low-income consumers, the impact on traffic, and the effort to get to national price points.
“Real incomes are down with the low-income consumer,” Kempczinski said. “That is absolutely going to put pressure on visits in the QSR industry.”
Franchisees are the ones who dictate prices on the menu, which can lead to wide variations from one state to the other. According to Price Pulse data from Restaurant Business sister company Technomic, the cost of a Big Mac combo can range from $8.19 to $11.69, averaging about $9.44.
Combo meals are generally priced at a discount to the items sold individually, but the existence of $1 drinks softens the discount. In effect, the company is telling operators to provide a set percentage discount of 15% on those prices.
So, if the prices of a Big Mac, fries and a drink come to $11.69, the 15% discount would bring the combo meal down to $9.94.
The Extra Value Meals haven’t been marketed since before the pandemic. But the news effectively brings them back. Operators will sell $5 Sausage Egg McMuffin and $8 Big Mac combo meals in September. In November, the breakfast deal will be on the Sausage Egg and Cheese McGriddle, the $8 meal will be on the 10-piece Chicken McNuggets.
The combo pricing will likely put pressure on the company’s major competitors, notably Wendy’s, Burger King and Jack in the Box, many of whom may not have the store-level finances to handle the discounts. It also promises that the value war started last year will only intensify and continue through the balance of 2025.
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