The Real Reason for the Removal of McDonald’s and Wendy’s Dollar Menu

With the increase of minimum hourly wage of restaurant crew and staff, the world’s famous fast food chains are in the verge of phasing out the dollar menu. This is in response to the low annual sales and most of the companies trial in reviving the regular bills to play higher cards. Burger King is the latest food chain to express their concern how the increase in rates will affect the dollar menu of all restaurants entirely as companies will now have lower buffers to accommodate the costs of maintaining it.

Similarly, McDonald’s and Wendy’s have implicated their interest in making a change as they began rolling out changes in their lower range menu items. Only this week, Wendy’s has announced the “4 for $4”, a selection of Jr. Bacon Cheeseburger, small French fries, four pieces of chicken nuggets, and a small drink. In essence, this only meant they are trying to incorporate a combo with each item costing $1.

How food chains deal with their love-hate relationship with $1 meals

Hesitantly, fast food chains believe that the reason why many customers flock to their food joints is because the industry and the public love $1 items and affordable promotions. Unfortunately, food chains do not exactly worship the idea of formulating these kinds of tactics just to boost customer rates. The are concerned as to how these promotions can eventually hurt their revenues as customers continue to patronize cheap and affordable menu items.

one dollar bill

In order to scrap this notion off of consumers, fast food restaurants such as Wendy’s are experimenting on new pricing methods and strategies to play our how customers can spend beyond the $5 mark. Taco Bell did the same thing last year with it’s introduction of the “Dollar Cravings” wherein several items are priced as $1 each, enticing consumers to buy more. McDonald’s followed suit with its double cheeseburger and fries combination for only $2.50, which of course made customers thirsty, urging them to spend at least $3 in total to have a drink with their meal.

The magic of $5 meals

Through this strategy, fast food chains and pricing experts have identified $5 for a full meal is the perfect value as a selling point. It looks affordable and sensible to spend at least this amount to get a burger, fries, drink, and if it’s a lucky day, a dessert. Most importantly, consumers who are in a constant lookout for a deal easily see this number as it’s reasonable for them.

Most experts find this value alluring especially when a food chain is trying out a new promotion. The president of the professional public relations company DFPR, Derek Farley, explains that $5 is the consistent threshold to recreate and reinforce a fast food idea, making it ideal for the owners, company and most importantly, to the eaters.

McDonald’s and Wendy’s have both acknowledged that by staying far away from the dollar menu through the incorporation of “Right Price, Right Size”, they were unable to entice budget-conscious consumers. The $5 value allows fast food chains a guarantee that consumers will start spending more than $1 in their place. Emil Brolick, the CEO of Wendy’s, knows that their current strategy is not working hence the need to step up their game and pattern their value meals to something similar as the “4 for $4” concept.

Why do fast food chains need to provide menu items with best value?

The answer lies in the McDonald’s all-day breakfast offer, with the price of the items averaging at $2.71, almost twice as much as what the Dollar Menu exhibits. The major change of the world’s biggest food chain has made it harder for those still gearing up on $1 to cope up. What more, with the all-day breakfast offer, many consumers have seen the value of getting a full meal with at an even more affordable cost.

This is why Wendy’s is pressured to look for menu options that can give customers and the company value and profits, respectively. It may mean higher store goers for McDonald’s, that is true, but will it mean less trips to the drive-thru. In essence, every trial fast food chains do can harbor an equal reaction to the company thus it is important to understand how value works for customers without affecting any of the profit drivers of the fast food chains.

Or maybe, all fast food giants need to take a walk down memory lane and remember the 2009 $5 Footlong offer of Subway, which boosted the company’s sales over 17 percent, amidst a time where recession is at large.

Join the Conversation

1 Comment

  1. Patricia E. O'Neil says:

    Can’t get signed up won’t let me. my email address is correct. I would like to order Panera bread and also get Golden Corral coupons and other coupons

Leave a Reply