The Golden Arches Embrace a Bold New Strategy
Here’s the thing that shocked most people about McDonald’s recent moves. Starting January 7, 2025, the company launched its McValue platform nationwide, offering all-day savings every day at U.S. restaurants with features like the “Buy One, Add One for $1” deal and the popular $5 Meal Deal. This wasn’t just another promotional gimmick. This represented a fundamental shift in how the world’s largest fast-food chain thinks about pricing. The company essentially decided to prioritize customer traffic over profit margins in ways that would have seemed impossible just a few years ago.
Since 2014, McDonald’s menu prices had doubled, far outpacing the 31% overall inflation rate, with specific items like the Quarter Pounder with Cheese Meal and 10-piece Chicken McNuggets Meal seeing increases of 20% and 28% respectively since 2019. But something had to give. Customers weren’t just complaining anymore – they were walking away.
When Crisis Forces Innovation
The turning point came in early 2024 when things got really ugly. A viral $18 Big Mac combo meal at a rest stop sparked widespread outrage online, later prompting a rare open letter from McDonald’s USA president saying the pricey meal was an “exception” and that the chain’s prices hadn’t outpaced inflation. But the damage was done. CEO Chris Kempczinski admitted that consumers no longer saw McDonald’s as a good value, with combo meals priced over $10 shaping value perceptions negatively.
Low and middle-income consumers increasingly shied away from fast-food restaurants, with visits from low-income consumers falling by nearly double digits in the first three months of 2025 compared to 2024, while middle-income consumer visits fell nearly as much. The company had created its own crisis through years of aggressive pricing increases.
The $5 Meal Deal Phenomenon
Nobody expected what happened next. McDonald’s summertime $5 Meal Deal accounted for 9% of the company’s total revenue dollars in Q3 and Q4, with around 25% of McDonald’s patrons ordering the deal in the weeks following its June 25 launch. That’s an absolutely staggering adoption rate for a single promotional item. Third-party analytics showed that foot traffic rose appreciably after the launch, with packed drive-through lines and busy staff churning out orders at unprecedented levels.
The numbers tell an incredible story. The promotion brought back lapsed consumers, with 12% of patrons who bought the meal having not visited in the preceding three months, and about 5% being entirely new customers. Despite concerns about profit margins, McDonald’s executives revealed that the average check on the $5 meal deal exceeded $10, indicating customers were adding additional items to their orders.
The Financial Gamble Behind the Golden Strategy
Here’s where things get really interesting from a business perspective. Industry analysts reported that McDonald’s franchisees were making between just 1% and 5% profit on the $5 Meal Deal, which translates to between a nickel and a quarter per meal. That’s razor-thin margins that would terrify most business executives. But McDonald’s had a bigger plan in mind.
The company and its US franchisees agreed to price combo meals at 15% less than buying items separately, with McDonald’s offering financial support to franchisees who agreed to lower prices. This was unprecedented – the corporate parent essentially subsidizing franchise losses to maintain consistent pricing nationwide. Despite a 3.6% decline in U.S. same-store sales in Q1 2025, franchisee margins in International Operated Markets remained stable at 80-85%, while International Developmental Licensed Markets averaged 75-80%, highlighting the franchise model’s resilience.
The McValue Revolution Expands
What started as a desperate summer promotion evolved into something much bigger. The McValue platform now includes free medium fries with a $1 purchase every Friday in 2025 and a free McCrispy chicken sandwich for new app users. The new “buy one, add one for $1” deal applies to popular breakfast, lunch and dinner items, allowing customers to add an additional item for just $1 when they buy one full-priced item from the McValue menu.
Beginning September 8, 2025, McDonald’s rolled out new Extra Value Meals with slashed prices on eight popular combo meals, offering promotional prices like $5 Sausage Egg McMuffin meals and $8 Big Mac meals, followed by $5 Sausage, Egg and Cheese McGriddles and $8 ten-piece Chicken McNuggets meals in November. The scope of these discounts was unlike anything the industry had seen in decades.
