Coming price cuts at McDonald’s may signal a broader fast food price war
National News
McDonald’s is cutting prices on some combo meals to woo back customers who’ve been turned off by the rising costs of grabbing a fast food meal.
The price drop may induce its rivals, who have run into some of the same pricing issues, to follow.
Starting Sept. 8, McDonald’s will offer Extra Value Meals, which combine select entrées like a Big Mac, an Egg McMuffin or a McCrispy sandwich with medium fries or hash browns and a drink. Prices will vary by location, but McDonald’s said Extra Value Meals will cost 15% less than ordering each of those items separately.
To kick off the promotion, McDonald’s will offer an $8 Big Mac meal or a $5 Sausage McMuffin meal for a limited time in most of the country. Customers in California, Alaska, Hawaii and Guam will have to pay $1 more for those meals.
McDonald’s for years has seen a steady decline in visits from customers in the U.S. who have household incomes of less than $45,000 per year. CEO Chris Kempczinski said those consumers, and others, no longer see McDonald’s as a good value.
At a McDonald’s near the company’s Chicago headquarters, for example, a 10-piece Chicken McNugget meal costs $10.39.
Higher prices have been been a drag on sales. McDonald’s same-store sales – or sales at stores open at least a year – grew 2.5% in the April-June period, but that was mostly because of higher prices. Fast food visits by lower-income consumers dropped by double-digit percentages industrywide in the second quarter, McDonald’s said.
“Today, too often, if you’re that consumer, you’re driving up to the restaurant and you’re seeing combo meals priced over $10,” Kempczinski said during a conference call with investors in August. “That absolutely is shaping value perceptions in a negative way. So we’ve got to get that fixed.”
McDonald’s job has been made harder by prices that can vary widely around the country. In May 2024, after a post on X about a Big Mac meal in Connecticut that cost $18 went viral, McDonald’s called it an “exception” and noted that franchisees set prices for nearly all U.S. restaurants.
The company also blames higher costs. The average price of its menu items rose 40% between 2019 and 2024, McDonald’s said, to account for a 40% increase in the cost of labor, packaging and food.
But within a month, McDonald’s introduced a $5 Meal Deal, which combined a McDouble burger or a McChicken sandwich with small fries and a small drink. That deal proved so popular it was extended through this summer.
In January, McDonald’s added another promotion, letting customers buy a limited number of items for $1 if they bought one full-priced item. Those deals will remain alongside the Extra Value Menu for now, McDonald’s said.
Other chains are also seeking to grab the attention of potential customers. In late August, Domino’s launched its Best Deal Ever promotion, offering any pizza with any toppings for $9.99.
Overall U.S. fast food customer traffic fell nearly 1% in the second quarter, according to Revenue Management Solutions, a consulting company. The company said price increases were sharply lower than previous quarters, suggesting that chains are already offering more deals.
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When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.
In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.
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