McDonald’s doubles down on meal deals as consumers digest cooling prices

Chicken nuggies… taste better when they’re discounted. McDonald’s last week whetted appetites with news that it would extend its $5 meal deal into December. It’s expected that 80% of its 13.5K US locations would keep slinging the promo (burger, fries, nuggets, drink), which McD’s intro’d in June to lure back cost-conscious consumers. FYI: McDonald’s second-quarter sales fell for the first time in three years as folks dialed back their burger bites. McD’s wasn’t alone in its soggy performance:

• Droppin’ deals: As fast-food spending cools, Domino’s, Wendy’s, Dunkin’, Taco Bell, and Burger King have all recently pushed promos (think: $6 breakfast combo).

• Cheerless chains: Fast-casual spots BurgerFi, Red Lobster, and Buca di Beppo recently declared bankruptcy. Americans are opting to eat at home more as restaurant inflation outpaces grocery-price growth.

Deal or no deal… It’s not just fast food that’s serving up discounts. Retailers including Target, Walmart, and Walgreens have cut prices on thousands of staples like milk, diapers, pet food, and snacks to drum up demand. Earlier this month, Kroger’s CEO promised $1B in price cuts if its planned merger with Albertsons went through. The discounting push from America’s biggest chains may have helped price growth cool across the board: in August, annual inflation dropped to its lowest level since early 2021. And from July to August, online grocery prices fell by the most in a decade, while the cost of staples like bacon, bananas, and bread dipped.