McDonald's exec says average menu item costs 40% more than in 2019

Joe Erlinger, president of McDonald's USA, addressed claims that the company significantly raised its prices, stating that the average menu item cost has risen by 40% since 2019. Erlinger refuted allegations of a 100% price hike, noting specific increases like 27% for a Big Mac meal and 44% for medium fries. McDonald's is responding to consumer spending pullbacks with a new $5 value meal promotion, aimed at reinforcing its reputation for affordability amidst rising costs.

Analyst Perspective on McDonald's $5 Value Meal

Analysts at BTIG view McDonald's upcoming $5 value meal as primarily a strategic move to enhance the company's perception as a value leader rather than a direct profit driver. They believe that while this promotion might negatively impact McDonald's sales and margins by leading to a decline in average checks, the essential goal is to shift the public narrative. This shift aims to counteract the negative publicity surrounding recent price hikes by refocusing attention on McDonald's commitment to providing affordable options. The analysts suggest that the promotion, although potentially detrimental to short-term financials, could help McDonald's reinforce its reputation for value in the fast-food industry.