McDonald’s (NYSE:MCD) decision to shave 15% off the price of its combo meals continues to weigh on rivals with shares of Burger King parent Restaurant Brands (QSR), Wendy’s (WEN), Yum! Brands (YUM), Domino’s Pizza (DPZ), Papa John’s International (PZZA), Red Robin Gourmet Burgers (RRGB), and Shake Shack (SHAK) all trading 1% to 2% lower.
The burger chain and its U.S. franchisees agreed to keep the cost of eight combo meals 15% below the cost of the individual items within each meal. The company will also reportedly offer Extra Value Meals later this year with $5 breakfast options and $8 Big Mac and McNugget combo meals.
The move hopes to re-establish McDonald’s (NYSE:MCD) value proposition after facing mounting criticism that the chain is no longer a cheap alternative to casual dining chains like Chili’s (EAT), Applebee’s (DIN), and Panera.
To lure back value-conscious customers, McDonald’s (NYSE:MCD) has employed several initiatives including an expanded McValue Platform, extending the $5 Meal Deal, Buy One, Add One for $1, and now a cheaper combo meal. These measures drove traffic to its restaurants, translating into a 3.6% increase in global comparable sales in the second quarter, the company’s best since Q4 2023.
McDonald’s (MCD) shares are up more than 1%, reaching a 4-month high.