McDonald’s has long catered to low-income customers with its value items and everyday low prices on its menu. However, the company has been losing price-conscious customers, but it sounds like the restaurant is moving forward with a plan to get them back.
Earlier this month, McDonald’s CEO Chris Kempczinski admitted that the company was losing its lower-income customers and made it clear that the fast food chain would look to change its prices to solve that problem.
Now, just a few weeks after Kempczinski’s comments, it sounds like the company is indeed moving forward with a price overhaul on its menu.
McDonald’s is Losing Low-Income Customers
McDonald’s has been courting price-conscious customers, rolling out its $5 Meal Deal last year, followed by its McValue menu earlier this year, which included a Buy One, Add One for $1 deal as well as the new Daily Double deal. However, those moves were not exactly successful.
While the company was seeing an increase in middle and high-income customers, Kempczinski indicated that McDonald’s was still losing its more price-conscious customers.
“The U.S. remained challenging as visits across the industry by low-income consumers once again declined by double digits versus the prior year period,” Kempczinski said earlier this month. “Reengaging the low-income consumer is critical as they typically visit our restaurants more frequently than middle- and high-income consumers.”
McDonald’s Considered Price Changes
While McDonald’s has obviously tried multiple options to lure back customers, Kempczinski seemed to think that the high prices were a big reason why McDonald’s was losing low-income customers.
Kempczinski specifically indicated that the fast food chain would look to lower its prices on combo meals.
“Today, too often, if you’re that consumer, you’re driving up to the restaurant and you’re seeing combo meals (that) could be priced over $10, and that absolutely is shaping value perceptions in a negative way,” Kempczinski said. “So we’ve got to get that fixed.”
McDonald’s generally allows each franchise to set its own prices, but it was pretty clear that the company wanted to lower prices across the board.
McDonald’s Lowering Prices on Combo Meals
It looks like McDonald’s is moving forward with these price changes.
According to a report from CNN, McDonald’s and its franchisees have agreed to cut prices on eight combo meals, pricing the meals 15 percent cheaper than they would cost to order the items individually. McDonald’s has also pledged financial support to its franchisees if they agree to lower prices, according to CNN.
The new prices are set to go into effect next month.
CNN also reports that McDonald’s will expand its combo offerings with a $5 breakfast deal and an $8 Big Mac and McNugget special in the coming months.
Needless to say, it sounds like McDonald’s is doing what it can to bring back low-income customers, and everyone will benefit from the low prices.
