The $18 Big Mac That Changed Everything
Picture this: you pull up to a McDonald’s drive-thru, and the combo meal you’ve been ordering for years suddenly costs eighteen bucks. That’s exactly what happened to one unlucky customer at a Connecticut rest stop in 2023. In 2023, an $18 Big Mac combo meal went viral, sparking a debate that the chain has drifted from its affordability roots. While this was considered an outlier at a highway rest stop, the damage was already done.
The viral incident became a symbol of something much bigger happening across America’s favorite fast-food chain. Overall, the prices at McDonald’s have risen an average of 100% in the past 10 years, which is much more than the rate of inflation in general. That’s double the price for your favorite meal in just a decade. When people started comparing McDonald’s prices to sit-down restaurants, something had to give.
The CEO’s Bold Admission
CEO Chris Kempczinski recently admitted the menu has gotten too expensive. This wasn’t some corporate spin or damage control – it was a rare moment of transparency from the top. During an earnings call, Kempczinski didn’t mince words about what was happening. “Too often … you’re seeing combo meals priced over $10, and that absolutely is negatively shaping value perceptions,” Kempczinski said. He added that the “single biggest driver” of what shapes a consumer’s overall perception of McDonald’s value is the menu board.
The numbers backing up his concern were pretty stark. The average price of a McDonald’s menu item has increased by roughly 40% since 2019, so it is no surprise that consumers are pursuing other options for quick meals. “Over the last several years, our system has sustained significant inflationary cost increases ranging from 20% to 40% depending on the market,” said Kempczinski. When your core customers – families on tight budgets – start looking elsewhere, you know you’ve got a problem.
The Great Customer Exodus
The impact on McDonald’s customer base was dramatic and measurable. In May, Kempczinski said the company’s U.S. first-quarter traffic this year from low-income consumers declined by “nearly double digits,” and middle-income consumer traffic fell by almost the same amount. These aren’t just statistics – they represent millions of families who used to rely on McDonald’s for quick, affordable meals.
He added traffic growth from high-income consumers “remains solid, illustrating the divided U.S. economy where low- and middle-income consumers, in particular, are being weighted down by the cumulative impact of inflation and heightened anxiety about the economic outlook.” The Golden Arches had inadvertently become a symbol of America’s growing wealth divide. While wealthy customers kept coming, working families were forced to look elsewhere for their dinner solutions.
The McDiscount Solution Emerges
After months of internal discussions and negotiations with franchisees, McDonald’s finally announced its response. McDonald’s will cut prices on eight popular combo meals by about 15 percent starting in early September. According to The Wall Street Journal, McDonald’s aims to lower prices on eight popular combos to roughly 15 percent below the cost of buying the items separately, and the company will help cover the difference if franchisees opt in.
The “Extra Value Meals” branding returns as the chain works to reset value perceptions into early 2026. This wasn’t just a temporary promotional stunt – it was a fundamental shift back to McDonald’s roots as the affordable option. The timing was crucial, as competitors were already offering similar or better discounts to attract price-conscious customers.
Breaking Down the New Pricing Strategy
The math behind McDonald’s new approach is pretty straightforward. Your wallet probably appreciates hearing that a $10 bundle becomes about $8.50 (because any discount is a great discount). But the real game-changer comes with the specific promotional offers. New promos follow this fall, including $5 breakfast bundles and $8 Big Mac and McNuggets meals. A $5 breakfast and $8 Big Mac and McNugget combo meal special will also run later this year, with the company advertising them as Extra Value Meals.
By mandating a 15% discount in its combo meals, the fast-food giant will lower prices an average of 4.6 percentage points. But it will also catch up with the discounts its competitors already provide. McDonald’s realized they weren’t just fighting inflation – they were fighting for relevance in a market where other chains were already offering better value.
The Franchise Partnership Challenge
Getting franchisees on board wasn’t easy. McDonald’s and its US franchisees agreed to price eight popular combo meals at 15% less than the total cost of buying the items separately, with the chain offering financial support to franchisees if they agree to lower prices, according to a source familiar with the company’s plans. After weeks of discussions, McDonald’s and its U.S. franchisees agreed to keep the cost of eight popular combo meals 15% lower than if the items were bought separately, according to company materials seen by The Wall Street Journal.
The company promised to provide financial support if the franchisees agreed to the change, people familiar with the matter told the Journal. This financial backing was crucial because franchisees operate on thin margins and couldn’t absorb significant price cuts without support. The corporate-franchise partnership became essential for making the strategy work across the entire system.
Comparing with the Competition
McDonald’s wasn’t operating in a vacuum – their competitors had been offering aggressive discounts for months. We also analyzed the bundled meal prices for nine different items from McDonald’s three biggest fast-food burger competitors, Wendy’s, Burger King and Jack in the Box. Those companies’ discounts averaged 15.6%, or deeper than McDonald’s current and potential future discounts.
The competition was particularly fierce in certain areas. Jack in the Box is a particularly aggressive discounter, at least when it comes to its bundled meals. The nuggets had the highest discount of anything we analyzed, at 19.1%. McDonald’s had to match or exceed these offerings to win back customers who had already started exploring other options.
The Technology and App Strategy
Beyond just lowering menu board prices, McDonald’s is leveraging technology to create additional value. In January, the company began rolling out a new “McValue” menu category, part of the fast-food company’s comeback strategy, offering customers a “Buy One, Add One for $1” option for breakfast, lunch and dinner. The company simultaneously launched app-specific deals to drive customers to the platform, such as free medium fries with a $1 purchase every Friday in 2025 and a free McCrispy chicken sandwich for new app users.
The digital strategy is paying off in customer loyalty. The $5 Meal Deal has stabilized traffic among middle- and low-income consumers, while loyalty programs like MyMcDonald’s Rewards have boosted customer retention. Data shows loyalty members visit 26 times annually post-enrollment – more than double pre-enrollment rates – demonstrating the power of value-based engagement.
The Marketing Momentum Behind Extra Value Meals
The chain is already getting considerable publicity about its changes, and that’s without the company saying anything about it. McDonald’s will be pricing a Big Mac Extra Value Meal combo at $8 as a limited-time offer in September. That will provide a major marketing boost to the chain’s price-lowering effort.
The timing couldn’t be better for McDonald’s marketing team. McDonald’s will help franchisees cover any losses from the lower-priced combos, while the company will also contribute to marketing the deals, which revive the “Extra Value Meal” branding first introduced in 1991. The nostalgic branding brings back memories of when McDonald’s was truly the affordable option for American families.
Financial Impact on the Franchise Model
McDonald’s unique business model helps insulate the company from some of the financial pressure of these price cuts. With 95% of its 42,059 global restaurants operating as franchises, the company generates stable royalty and lease income while minimizing direct input cost exposure. In Q2 2025, franchisee margins in IOMs and IDLMs collectively contributed $4 billion in operating profits, underscoring the model’s scalability.
The strategy’s success lies in its ability to preserve franchisee margins. Despite the 3.6% decline in U.S. same-store sales in Q1 2025, franchisee margins in International Operated Markets (IOMs) remained stable at 80–85%, while International Developmental Licensed Markets (IDLMs) averaged 75–80%. This stability gives McDonald’s flexibility to support pricing initiatives without devastating individual franchise owners.
