McDonald\u2019s is working to introduce a value meal in U.S. stores to help offset an increasingly challenging environment for consumers, two people familiar with the matter told CNBC.<\/p>\n
The people said the $5 meal could include four items: a McChicken or McDouble, four-piece chicken nuggets, fries and a drink. The value meal was first reported by Bloomberg News.<\/p>\n
The potential new offering comes at a time when low-income consumers are beginning to pull back on spending, particularly at fast-food brands. Mentions of low-income consumers on company earnings calls are at their highest levels in nearly two years, according to data from Bank of America. Executives from McDonald\u2019s to Wendy\u2019s to Dave and Buster\u2019s have all noted the restraint in spending. <\/p>\n
McDonald\u2019s recently reported a mixed first quarter, with U.S. same-store sales slightly missing expectations. Higher prices helped grow average checks, but some consumers pulled back as a result of the steeper costs.<\/p>\n
\u201cConsumers continue to be even more discriminating with every dollar that they spend as they faced elevated prices in their day-to-day spending, which is putting pressure on the [quick-service restaurant] industry,\u201d CEO Chris Kempczinski said on the company\u2019s earnings call on April 30.<\/p>\n
He added that McDonald\u2019s has to be \u201claser-focused\u201d on affordability to attract diners.<\/p>\n
On the call, Kempczinski said the company is working on a national value deal in the U.S., and the company\u2019s Chief Financial Officer Ian Borden said the U.S. leadership team was working closely with owner-operators in this environment. McDonald\u2019s corporate and franchisees, who run 95% of McDonald\u2019s locations and weigh in on such offerings, are often at odds over promotions that could eat into owners\u2019 profits.<\/p>\n
An initial proposal by McDonald\u2019s for the $5 value meal did not clear necessary hurdles, and additional details are now being discussed, according to a person familiar with the process. A second person said Coca-Cola added marketing funds to the equation to make the deal more appealing.<\/p>\n
McDonald\u2019s declined to comment to CNBC. Coca-Cola did not immediately respond to a request for comment.<\/p>\n<\/p>\n
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