When the Dollar Menu came back this year, fans of McDonald’s were happy to see a cheap value menu option return. The new $1/$2/$3 menu has a bunch of low-cost eats that mean our wallets get a break. Win-win for both, right? Maybe not so much, as customers are shelling out more than before according to the company’s financials.
McDonald’s CEO Steve Easterbrook just revealed in an earnings conference call that their new value menu made sales soar. Numbers jumped 5.5% worldwide, with a 2.9% increase in the US, where the Dollar Menu reboot launched in January. The big reason? Customers were spending more thanks to a set of eats marketed to save money.
Here’s how that bill of fare gets you: because the items are generally cheaper, chances are you’re gonna buy more. Easterbrook says that many of their new transactions were people making their own meals out of the $1/$2/$3 items, or adding them onto combos. Those add up to overall purchases that cost more, even though customers are buying based on a low price.
I’ve been a firsthand victim of that mentality. I just rolled up to a local McD’s last week, and made a custom dinner out of a Classic Chicken Sandwich ($3), Buttermilk Crispy Tenders ($2), and a drink ($1). After tax, my total was just 7 bucks, the same value (or slightly more, in some cases) than a standard combo meal. Just the sandwich alone could’ve filled me up for way less cash, but I figured I could spend more based on how inexpensive things looked. Man, did those dollars creep up fast.
Of course, I’m just part of one group of customers utilizing the new $1/$2/$3 menu in that fashion. There are “single-dollar consumers” out there, as Easterbrook calls them, that just get a single item on a tight budget. Overall, though, the general trend is that because stuff is discounted, people are willing to buy more of it. Even if that means they’re spending extra dough as a result.
This isn’t a hit on McDonald’s new option in any way, as it’s great to have the customization and ability to go really stingy if needed. However, it should be a wake-up-call to those thinking they’re being thrifty when that may not always be the case.