McDonald’s Revamped Dollar Menu Rattles Competition

McDonald’s Corp has just unveiled a better version of its tremendously popular Dollar Menu, which was discontinued a few years ago. Analysts believe that the revamped menu, which will be launched Jan. 4, will intensify the fast-food industry’s price war.

The new menu includes the Happy Meal, Egg McMuffin, chicken tenders, and triple cheeseburgers in combinations that can range from $1 to $3 per menu. While foot traffic to fast-food restaurants has remained steady in recent years, the industry’s players are announcing discounts to keep their customers interested, and why not, win over new ones.

For instance, the Mexican-themed fast-food chain Taco Bell announced that it is working on the “biggest value push” on record.

McDonald’s explained that with the new menu, it has managed to reach a balance. If the menu is too cheap, it can have a negative impact on its profit margins. If it is too expensive, customers may head to its competitors.

McDonald’s Strives to Keep Both Partners and Customers Happy

This is why the original Dollar Menu was discontinued in 2013. At the time, McDonald’s partners complained that it had severely affected their profits. However, the disappearance of the popular menu upset many customers, which led to a steep fall in sales in the coming two years.

This year, McDonald’s is confident it has reached the perfect balance between what the franchisees need and what customers want. Around 90 percent of McDonald’s partners agreed to include the new Dollar Menu in their offer.

Analysts are confident the new value menu will enable the burger chain to grow and win back former customers. One day after the announcement, the company’s shares rose 2 percent in New York, marking the most consistent intraday gain in the last couple of months. Shares had already jumped 40% since the start of the year.

Image Source: Flickr

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