How McDonald's Lost Its Value Edge

The chain that staked its name on affordability found itself on the wrong end of a shaky economy

- Heather Haddon

When Americans hit hard times, McDonald's has relied on a simple recipe to keep sales humming: being fast and cheap. For many people these days, McDonald's is just fast.

"Bro what happened to McDonald's dollar menu?!" a Seattle woman asked on TikTok earlier this year, sharing images of a $12 McDouble meal and $3 fries.

The once-golden formula faltered. The number of fast-food customers who said the restaurant chain offered good value fell to its lowest point in a decade last year, according to a UBS Evidence Lab survey. Lower- and middle-income households have cut back on visits, contributing this year to the biggest drop in McDonald's quarterly U.S. sales since 2020.

The burger giant's leaders are all too aware there's a problem. Competition for the food dollar is stiff, with fast-food outlets fighting each other as well as higher-ticket options like Chipotle and Chili's, and even customers' own kitchens.

"There are better options," said Kyle Elliott. The 30-year-old music producer from New York tends to visit Chick-fil-A, Shake Shack or the neighborhood food cart for a quick meal rather than McDonald's.

But the chain that pioneered the modern fast-food industry is caught between a corporate office that wants beefier, more attractive deals and many restaurant franchise owners who say their bottom lines can't absorb much lower prices.

Some operators warn that the kind of deals McDonald's is now promoting to draw in customers—some of which chop between 40% and 50% off the regular price—are eroding their already shrinking profits. Profit margins for the chain's U.S. restaurants started to decline last summer and haven't snapped back since, securities filings for McDonald's show.

McDonald's is on a mission to claw back sales—and its value edge.