McDonald's officially adds $5 value meal to menu

McDonald's (MCD) is joining the ranks of fast food chains adapting to economic pressures by introducing a new value meal option. Starting June 25, the global fast food giant will add a $5 value meal to its menu, a move aimed at addressing growing cost consciousness among consumers.

This strategic decision comes amid a broader trend in the fast food industry, with numerous chains rolling out similar value-focused offerings.

Yahoo Finance's Brooke DiPalma breaks down the details.

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This post was written by Angel Smith

Video transcript

We're looking for a deal on your dinner.

Mcdonald's might have you covered?

There's a new value meal at the Golden Arches and it's available starting today.

Mcdonald's, one of the latest fast food chains to add value items to their menu in an effort to bring consumers back into the restaurants for more.

Let's bring in our own Brooke Dipalma.

I mean, Brooke, I remember the only lure that I needed back in the day growing up was just the, the happy place.

The, the playpen, the Happy Meal Toys.

Yeah, let's push those aside.

Now mcdonald's is getting very serious is about bringing consumers back in the door, especially after the latest quarterly report.

So this $5 meal deal, it includes a MC double or a mcchicken, a four piece chicken nugget, a small fries and a small drink.

Now, this comes after mcdonald's did have a rough first quarter, we saw us same store sales jump slightly up 2.5% but that was less than what Wall Street had expected.

And so now it's hoping to use this $5 meal deal in order to bring consumers back in and is not alone as you mentioned there are others doing this.

We heard from KFC back in April, they introduced a 499 Meal Burger King also introduced that $5 your way meal.

And now mcdonald's the latest, we also had Subway Us Us President last week with those $3 dippers.

But here's how this needs to work, Brad.

In order for franchise operators to really see a return on this, we need to see increase in guest counts, more customers need to come in the door because value menus don't necessarily increase.

Mar investors are also hoping that not only does this increase guest count, but then when they get consumers in the door, the consumers are actually saying, hey, I'll upgrade this or I'll get a two mcchicken or two mdos.

I'll add more to my items or more to my ticket as well.

All right, I guess for all the people that are out there bulking and on the value menu items, two of them do.

All right, let's also focus in here on California one mcdonald's franchise owner decided to close one location here.

This has been interesting.

So what did she say was behind this move?

Yes, this is Scott Roderick.

He said that this was necessarily a reaction to California legislation in addition to the landlord wanting rent per square foot high property taxes as well as mall charges.

So he said that because of that California Fast Act that we saw go into fact on April 1st, that increased minimum wage from $16 to $20.

He said that those were one of the factors in addition to the others that I mentioned that he had to make the difficult decision to close his location in San Francisco.

Now a franchise expert that I spoke to said, you know, this won't necessarily impact mcdonald's at large given it's just one location.

Of course, if we see multiple say a hundreds, then it'll definitely hit mcdonald's.

But this does affect the way that consumers think about the healthiness of the brand.

Think about how mcdonald's is doing at large when you see your local mcdonald's clothes.

All right, Brooke Dipalma breaking down and tracking all things, the Arcos Dorados, if you will uh Golden Arches, everyone there.

That's the translation.

Thanks so much.

Appreciate it.