Customers coming back to McDonald's.
Yeah, not a huge surprise because McDonald's specifically offered its
$5 value meal to get people back in the door.
Higher prices at both McDonald's and other chains, due in
large part to rising commodity and labor costs, have deterred
many people from going out for fast food.
It's roughly priced around the same level as fast casual
these days.
So a lot of families think, well, why don't we
just sit down at a booth rather than just doing
takeout from Mcdee's if it's going to cost about the
same?
So the $5 Value Meal came out in June.
It was expected to last only about four weeks.
But now, according to an internal memo obtained by CNBC,
McDonald's is now going to stretch that Value Meal offer
all the way into August.
And the reason, according for that memo, is traffic is
way up at McDonald's restaurants as a result of the
value meal, which is OK, that's good for McDonald's.
But that is a shot across the bow of the
entire fast food industry because what it says and it
says it clearly, is that at that sector of the
retail and restaurant industry, prices matter most.
And you just don't have a lot of room to
raise prices.
And what this this whole episode says is as long
as you're offering reasonable prices as a fast food restaurant,
you will get customers.
Once you leave a certain threshold in that regard card,
forget it.
They stop coming.
And I think all of the chains out there going
to be paying very close attention to McDonald's lesson here.