McDonald's to Boost Its Dollar Menu After a Rare Slide in Sales

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Dollar MenuMcDonald's (MCD) franchisees have spoken. They're fine with the world's largest restaurant chain beefing up its Dollar Menu, but they're not cool with Mickey D's breaking the buck with lower-priced offerings.

The Golden Arches will add two new items to the Dollar Menu in the coming weeks: The Grilled Onion Cheddar Burger, a smaller version of its limited-time CBO premium burger -- without the bacon -- will begin selling in late December. A snack size portion of its Fish McBites -- the fast food giant's spin on popcorn chicken using fish -- will be added to the Dollar Menu shortly after that.

McDonald's also wanted its franchisees to back $0.69 hamburgers and $0.89 cheeseburgers, but the local advertising co-ops didn't approve the promotion, fearing that it would be too cheap for operators to deliver reasonable profit margins.

Ronald McDonald Isn't Laughing

McDonald's made it through the stateside recession and Europe's sovereign debt crisis without missing a beat. Now, when the economy is showing signs of life, customers are moving on.

The 34,000-unit chain experienced a 1.8 percent dip in global same-store sales in October, with a deeper 2.2 percent hit at its domestic locations. This may not seem like such a big deal, but it is for McDonald's.

You have to go all the way back to 2003 to find the last time that the company failed to grow its store-level sales over the same month during the prior year.

The consensus is that the company strayed too far away from the value message that made it popular. Adding fancy McCafe beverages and artisan salads may have helped push the average receipt higher, but the deal seekers who make up the chain's core customer base stopped coming.

For better or worse, McDonald's is ready to appeal to the country's frugal side again.

Grimace Be Gone

McDonald's can't afford to ignore the trend, even if its negative streak consists of just a single month at the moment.

The competition is ready to pounce at any sign of weakness. Burger King Worldwide (BKW) recently went public again, and Wendy's (WEN) has unloaded many of its distracting concepts in order to focus on its namesake burger chain.

Customers want more bang for their buck, and McDonald's is ready to let them have it.

Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of McDonald's. Motley Fool newsletter services have recommended buying shares of McDonald's and creating a bull call spread position in McDonald's.


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ugojoreds

mcdonalds $1.00 burger does not even look like meat??? what is it?/ colored grilled cardboard?? none of their burgers look like real meat.. and their breakfast sandwiches do not look like real eggs.. Is there anyone out there that can crack and egg and fry it up to put on a fast food sandwich?? I think if they could serve real eggs their breakfast business might do better.. Also a nice slice of tomato would be good.. what is that red slimey piece they put on the sandwiches??

December 02 2012 at 4:23 PM Report abuse rate up rate down Reply
pdbliz

I have 99.9% stopped eathing at Macks,,,,,,,,but,,if I do,,I open my item before I eat it and look for unwanted items,such as bugs,,,,,razor blades ,,,,,teeth,,,,,human hair,,,,,rats and ect.....
Never pays to be too carefull.!!!!!!!

December 02 2012 at 4:08 PM Report abuse -1 rate up rate down Reply
motown571

WHERE'S THE BEEF!!!

December 01 2012 at 10:15 PM Report abuse rate up rate down Reply
1 reply to motown571's comment
dembaitnswitch

Obama said LEAN FORWARD and he'll show it to you.

December 02 2012 at 2:00 PM Report abuse -1 rate up rate down Reply
Peg Lyons

There is only one item on McDonald's menu (and only sometimes) that I really enjoy because it tastes good and because it's low in calories, relatively speaking, and that's the Asian salad. I don't understand why they have it and then they don't and then they have it again. They keep the other salads year round. I don't like them, I don't buy them, they're too fattening.

December 01 2012 at 2:34 AM Report abuse rate up rate down Reply
brantaydes

I worked in advertising for McDonald's during the 1970s. Used to be that a quarter pounder was $1. That's where we pegged the brand - an inexpensive burger, fries and drink. Today that combo is around $6 without a coupon. Whoa, what happened. I can buy a tasty In and Out Burger for $2.85, and step up from there to 5Guys, Smash Burger and the Counter for about the same cost. So why McD. Only on the deal. McDonald's has forgotten where it started. Needs to take a lesson from In and Out. B

December 01 2012 at 12:51 AM Report abuse +2 rate up rate down Reply
1 reply to brantaydes's comment
Avice

Well, considering that an In and Out Burger would cost me approximately $600 in gas and a 5 Guys possibly a little less, I think I'd rather just spend $10 at Cheeseburger in Paradise (plus $10 gas).

December 01 2012 at 1:57 AM Report abuse +1 rate up rate down Reply
Wwhatever747

Sweet Karma, America's suffering, so expect a loss in profit but keep it alive and running, don't expect more and more or it'll bankrupt you McDonald's. Look at Hostess.

November 30 2012 at 10:45 PM Report abuse +1 rate up rate down Reply
minimaniac99

I would not eat McDonalds crap if they paid me. Remember pink slime? What other stuff do they put in their food

November 30 2012 at 9:12 PM Report abuse +3 rate up rate down Reply
freethedems2012

JIMLAPDANCE come back. I have written a new poem about your Barbie collection and toy airplanes.

November 30 2012 at 8:10 PM Report abuse -5 rate up rate down Reply
2 replies to freethedems2012's comment
evan_barthold

I luv Jimmy he can put his plane in my hanger anytime.

November 30 2012 at 8:16 PM Report abuse -5 rate up rate down Reply
freethedems2012

Jim is on the watch theft board. He thinks it has how to instructions.

November 30 2012 at 10:16 PM Report abuse -5 rate up rate down Reply
JOHN AND DONNA

I was watching a show about Mcdonalds overseas and they are bending over backwards getting the business over there the burgers and every other thing are huge size burgers and provide the best menu of items and here its a thin nasty hamburger Mcdonalds better start providing the USA a little better meals if not I hope they learn a lesson but probally not if they are going to just add some cheap dollar items

November 30 2012 at 7:57 PM Report abuse +2 rate up rate down Reply
JOHN AND DONNA

I saw a show on TV about fast food services in

November 30 2012 at 7:48 PM Report abuse +1 rate up rate down Reply