McDonald's Corp. (NYSE:MCD) aims to restore its image as an affordable fast-food option. The pivot comes as consumers complain about the increasing cost of Big Macs.
In some locations, Big Mac meals cost as much as $18. Now, McDonald’s and its U.S. franchisees plan to reduce the cost of eight combos—spanning breakfast, lunch, and dinner—by approximately 15%.
The new pricing will take effect in early September and remain in place through the start of next year.
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The Wall Street Journal reported that the plan coincides with a reintroduction of the so-called "Extra Value Meals" branding, which first launched in 1991.
For example, a combo priced at $10 could drop to $8.50 under the revised pricing structure.
"Customers are telling us they need more of the everyday value and affordability that defines the McDonald's brand," Joe Erlinger, head of McDonald's U.S. business, wrote in a recent internal message following the company's earnings release.
The company reported second-quarter adjusted earnings per share of $3.19, beating the analyst consensus estimate of $3.14. Quarterly sales of $6.843 billion outpaced the Street view of $6.682 billion.
Global comparable sales rose 3.8%, driven by a 2.5% increase in the U.S.
The move comes as fast-food restaurants face declining traffic amid persistent inflation and consumer caution about the economy.
While McDonald's reported an uptick in U.S. same-store sales last quarter after two quarters of decline, it acknowledged that customer traffic remained below expectations. The WSJ report on Wednesday added that visits to U.S. restaurants have fallen 1.7% so far this year, with fast-food chains seeing a sharper 2.7% drop, citing Black Box Intelligence.
Tensions over pricing have long existed between McDonald's and its franchisees. Operators generally set menu prices. While the company has urged restraint on visible items, franchisees have faced rising costs. This pushed the average Big Mac combo meal up 27% between 2019 and 2024. Prices vary significantly, ranging from as little as $5.69 in some smaller cities to nearly $19 at airports and travel plazas.
To encourage franchisees to adopt the lower prices, McDonald's is offering financial support to those who might lose money.
The company and franchisees will also contribute funds to market the new deals.
Price Action: MCD stock is up 1.47% at $315.49 at the last check on Wednesday.
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