McDonald's new value menu is piling up profits as fast as $1, $2, $3

Mony
25
0

CLOSE

McDonald’s plans to go green by 2025.
Time

McDonald’s new list of  burgers and other items priced at $1, $2 and $3 is aimed at creating value for customers, but it looks like its real value is to the fast-food giant’s bottom line.

The company introduced its new value menu in January with items priced at $1, $2 and $3 in hopes of getting customers to buy more profitable items.

The menu, along with price increases and customers buying premium products, helped boost McDonald’s first-quarter sales.

The idea was that cheap, tiered pricing would put more food and drinks on the list. But it also held out the hope that customers might gravitate to some of the more profitable, higher-priced choices.

The single-patty cheeseburger and a sausage burrito both came in at $1. But a 2-piece Buttermilk Crispy Tenders and some small McCafé beverages were priced at $2. The Sausage McMuffin with Egg or Classic Chicken Sandwich went for $3 along with Happy Meals for kids.

The strategy is working, McDonald’s says.

The improvements come as McDonald’s is continuing its campaign of modernizing its stores by adding delivery, touchscreen systems and mobile ordering in thousands of locations.

The fast-food chain’s U.S. sales at restaurants open at least a year rose 2.9% for the period, compared with a year earlier.

For McDonald’s restaurants worldwide, regardless of whether they were company-owned or franchised, sales at locations open at least a year increased 5.5%.

More: McDonald’s cheeseburgers in Happy Meals: Now by request only

More: McDonald’s to open 1,000 new restaurants, speed up tech upgrades

More: McDonald’s hopes customers buck up Thursday to new Dollar Menu

“More customers are recognizing that we are becoming a better McDonald’s, appreciating our great-tasting food, fast and friendly service and compelling value,” CEO Steve Easterbrook said in a statement.

When measuring overall performance at all locations, sales rose 7% when excluding the effect of currency fluctuations.

Revenue declined 9% to $5.14 billion, largely because the company has been converting more company-owned locations into franchises.

Net income increased 13% to $1.38 billion.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

Facebook Comments

Comments are closed.