McDonald's Tests $3.50 Bundles Amid Slump

McDonald's launched an eight-week test of low-cost meal bundles at 1,900 U.S. restaurants. The chain aims to counter falling customer visits with specific price points, such as a McChicken and small fries for $3.50. This move follows a third quarter where U.S. same-store sales declined.

U.S. same-store sales fell 0.2% between July and September. This marked the first drop in sales for the company since early 2025. The decline was smaller than the 0.5% decrease that Wall Street analysts had predicted. Revenue for the quarter stood at $7.16 billion, missing the expected $7.28 billion. Net income increased 9% to $2.49 billion. Adjusted earnings came in at $3.57 per share, beating the analyst forecast of $3.38.

Chairman and CEO Chris Kempczinski made the announcement during an investor conference call on Wednesday. He stated that the company is shifting marketing spending to support value meals. This strategy helped push sales into positive territory in September and October. Kempczinski said customers need a clear value proposition whether they buy a single item or a full meal.

Approximately 4,000 franchisees started their own bundle offerings before the official test concluded. These owners operate 95% of McDonald's U.S. locations. Not all franchisees have adopted the company's revamped McValue menu. Kempczinski noted in August that only 60% of U.S. restaurants were offering those items. The company replaced its U.S. president in the same month.

The fast food sector saw a 2.6% drop in foot traffic during the third quarter, according to Revenue Management Solutions. Many Americans face higher gas prices and living costs, which pressures spending habits. McDonald's has adjusted its value menu for over two years to compete with rivals like Taco Bell. Taco Bell offers ten menu items priced at $3 or less.

In June 2024, McDonald's introduced a $5 Meal Deal. It later added Extra Value Meals that provide a 15% discount on bundled items. In April, the chain added ten items costing $3 or less to the McValue menu. Kempczinski said previous efforts lacked compelling low-end deals for low-income consumers.

Global same-store sales rose 1.3% in the third quarter. Strong performance in Germany and Australia offset weakness in France. Protests in France began in September and affected sales. McDonald's shares rose more than 5% during morning trading on Wednesday.