McDonald’s $5 Meal Tells You Where Prices Are Headed
Whether you’re selling hamburgers or dry goods on a shelf at Walmart, the days of inflation boosting earnings are over for consumer companies.
Why now?
Photographer: Bloomberg
Between McDonald’s $5 value meal, Taco Bell’s $7 cravings box and budget breakfasts from Starbucks and Wendy’s Co., fast food chains are fighting hard to win over hungry Americans this summer. Why now? It comes down to price-sensitive customers voting with their wallets and forcing companies to chase traffic to grow revenue and profits.
Executives at fast food companies are now prioritizing volume in their strategies, experimenting with lower prices and new value bundles to see what boosts growth the most. This isn’t a sign that prices overall are headed back to pre-pandemic levels, but we should get a long period of stability as competition for diners and market share once again becomes the measure of success for companies, rather than the rapid price increases of the past few years.