McDonald's is eating part of the cost of your $5 value meal

McDonald's is subsidizing a portion of the cost for its new $5 and $8 value meals to attract and retain lower-income customers. This move comes as the company observed a significant decline in visits from this demographic, while higher-income customer traffic increased. The company is splitting the cost of these discounted meals with U.S. franchisees until early 2026. McDonald's corporate is covering approximately half of the effective price reduction, with significant expenses projected for the fourth quarter. This strategy aims to provide financial relief to inflation-burdened families and is considered a temporary measure to navigate a challenging economic period for consumers. This initiative is showing positive results, contributing to a modest increase in U.S. comparable sales for McDonald's. The company's stock saw a rise following the announcement. The broader economic context includes a "trade-down" effect where consumers,... download the app to read more