Fast food has always been a reactionary business. McDonald’s (MCD) – Get McDonald’s Corporation Report created the Big Mac in response to the success that Burger King had with the Whopper. Pretty much since that happened, when one chain does something, the other chain responds.
That’s why the menus at McDonald’s, Restaurant Brands International’s (QSR) – Get Restaurant Brands International Inc. Report Burger King, and Wendy’s (WEN) – Get Wendy’s Company (The) Report have a general sameness to them. Everyone sells roughly the same burger with little twists. Burger King has its flame broiler and Wendy’s has “fresh, never frozen” beef, but every chain has basically the same burgers.
You can trace those similarities down the menu. Offering chicken nuggets, having a fish sandwich, and selling some variation of a fried chicken sandwich have become required. Sure, there are variations — Wendy’s has baked potatoes and chili, Burger King has its Chicken Fries — but it’s mostly all the same.
In recent years, Wendy’s and Burger King have focused on value in a way that McDonald’s has not. Wendy’s made the 4 for $4 the focus of that pitch for a long time before moving into having the $5 Biggie Bag as its key value focus. Burger King has often offered (and offers right now) a $5 Your Way meal.
The premise is simple. You get a burger (or a chicken sandwich in some cases), nuggets, fries, and a drink. It’s a simple premise built around giving customers a lot for their money. These deals also give the chains some flexibility as they can rotate the sandwiches offered in their deals keeping them fresh.
Now, at a time when consumers are more focused on value than ever, McDonald’s has responded with a similar $5 deal built around one of its most popular sandwich lines.
McDonald’s Adds a $5 Deal
McDonald’s has generally built most of its value proposition around its $1 $2 $3 mix-and-match menu. That sort of replaced its old Dollar Menu, but that deal is more about getting customers to spend more. The new $5 deal is very similar to what Wendy’s and Burger King offer.
The chain will be offering a $5 value meal based on its fried chicken sandwich, Chewboom reported.
Scroll to Continue
“As part of the limited-time mobile app deal, you can get any Crispy, Spicy, or Deluxe Chicken Sandwich with a medium fries and soft drink for $5. Just take note that there is a limit of one redemption per week, per app account,” the website reported.
It’s interesting that the deal does not have a hamburger option, but it does give McDonald’s a price point equal to its rivals. The promotion ends on Sept. 4.
McDonald’s Is Making Value a Focus
McDonald’s CFO Kevin Ozan talked about the current economic environment and value-based offers during the chain’s second-quarter earnings call.
“We continue to focus on everyday affordability that customers are looking for, across both our everyday value menu and digital offerings,” the CFO said.
CEO Chris Kempczinski made it clear that value is a focus but it varies based on ever-changing market conditions and it can vary country by country.
“And as you think about what we plan for under a variety of scenarios, it goes to essentially what are our marketing levers and what are our investment scenarios. And do we need to lean into harder, for example, the value end of our menu platform, that could be one scenario,” he said.
It’s more about adapting to market conditions than having any one approach.
“On the other hand, if it continues at its current pace, maybe we don’t need to lean in as hard as that,” he said. “So, these are things that happen at a market level on a country-by-country basis, but I think the way our teams are looking at it is because of this uncertainty around consumer sentiment, we’re just having to plan for more different scenarios and that means having more flexibility in the marketing calendar to pivot, if need be.”
Source: https://www.thestreet.com/investing/mcdonalds-value-menu-move-targets-wendys-burger-king?puc=yahoo&cm_ven=YAHOO&yptr=yahoo