Retail N Illinois

Cheap eats are back: McDonald’s turns to new dollar menu to stay competitive

McDonald's brings back dollar menu,ph01

Oak Brook, Illinois-based McDonald’s knows one truth: Cheap sells when it comes to fast food.

Fast-casual restaurants such as Chipotle, Panera Bread and Corner Bakery are hot today, as consumers flock to fast food that tastes better and is served in brighter, airier spaces. The rise of these chains – with food priced slightly higher than what you’d find at McDonald’s or Wendy’s – has eaten into the profits of fast-food chains.

So, what’s a fast-food pioneer like McDonald’s to do? Bring back its once-beloved dollar menu.

McDonald’s announced Dec. 5 that it would revive this menu. Now, though, the items on the menu will include food costing not only $1, but $2 and $3, too.

Items on the menu will include sausage burritos, McChicken sandwiches and soft drinks that all cost $1. Items costing $2 include the Bacon McDouble sandwich and Sausage McGriddles, while $3 items include a new Classic Chicken sandwich, Triple Cheeseburger and a kid’s Happy Meal.

“We built this new menu with variety and value firmly in mind,” said Chris Kempczinski, president of McDonald’s USA.

Bringing back the dollar menu makes sense. McDonald’s had a good third quarter, and leadership at the company pointed to the introduction of $1 sodas and its McPick 2 deals, which let customers pick two items for a total of $5.

The original dollar menu disappeared in 2013. Back then, franchisees fretted that the lower-cost items, which so many customers would buy, resulted in lower profits, especially as the costs of ingredients in these items rose. The elimination of the dollar menu did result in some customer backlash, though, as diners sought cheaper food in other fast-food restaurants.

McDonald’s did debut a low-cost menu called the Dollar Menus & More later in 2013. That menu featured items that cost as much as $5. The chain ended that menu in 2015.

The new dollar menu will debut Jan. 4 of next year.