The New Dollar Menu at McDonald's Isn't the Same


Source: McDonald's.

Of all the innovations to come about over the past decade, the "Dollar Menu" at McDonald's (NYSE: MCD  ) was far and away one of the most beloved by consumers. Assuming you didn't fall for the add-on trap -- "do you want fries with that?" -- it was your one true shot at getting the best of corporate America. And now, presumably for that reason, it's dead.

At the beginning of November, McDonald's officially ended the decade-long experiment. As you may know by now, the "Dollar Menu" didn't totally go away. It was rather replaced by something called the "Dollar Menu & More," what McDonald's describes as the "menu you love, plus so much more."

And to a certain extent, the company is right. While the $1 McDouble is a thing of the past -- it's now $1.25 at the location closest to me -- a greater selection of items was added to the menu.

The new BBQ Ranch Burger and Buffalo Ranch McChicken will be available for $1. That's in addition to recent staples such as the Grilled Onion Cheddar Burger and Fruit 'N Yogurt Parfait. For $2 each, customers can choose from the Bacon McDouble, Bacon Buffalo Ranch McChicken, or Bacon Cheddar McChicken. And the company is featuring its 20-piece McNuggets for $5.

Sure, these are still good deals. But for the truly value-conscious consumer, it's impossible to deny that there was something special about a menu that offered everything for just $1.

During a recent presentation to industry analysts, an executive in McDonald's domestic operations addressed the change:

If you think about the Dollar Menu as a platform, we instituted this back in 2003. It's been foundational to our business for over 10 years. In fact, we have evolved it. The change that we recently made was not the first change. We've evolved it a few times over the years. And every evolution was designed to make sure that we stay relevant with our customer base. So where we are right now is just a continuation of that evolution.

To be fair, the evolution was inevitable. Inflation causes food prices to increase every year. For the category that matters most to McDonald's -- that is, "food away from home" -- it's currently projected to be in the 2% to 3% range in the United States. This has steadily eaten into McDonald's margins over the years and begun to cause angst among franchisees.

But is McDonald's now regretting its decision to kill the original "Dollar Menu"? In November, the first full month without it, same-store sales fell by 0.8% in McDonald's U.S. division. As the company noted in a press release announcing the results, "Ongoing competitive activity and relatively flat industry traffic trends negatively affected performance."

Is this evidence of backlash, or are consumers still simply struggling under the weight of the ongoing economic malaise? That remains to be seen. But it isn't hard to imagine that many customers are hoping it will usher in a return of the true "Dollar Menu" they love.

Discover three great stocks that you can own forever
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 


Read/Post Comments (15) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 15, 2013, at 6:35 PM, Wacked wrote:

    I remember when the Dollar Menu came out one of the guys that was working with me did not have wheels and he wanted to eat at McDs....i'm like they are expensive. He said they had a dollar menu sure enough they did. Thern over the next 5 years or so....found out that poor working class...the one's just around minimum wage loved that dollar menu.... if McDonald's would do a real study on sales in and near the ghettos of America they would find millions of dollars in sales off of that dollar menu and eventually created another new class of the poor that grew up[ off of the dollar menu and then buying higher priced items when more money became available.

  • Report this Comment On December 15, 2013, at 11:35 PM, tommsel1 wrote:

    I have only been to old Mac donalds one time since they decided to change the dollar menu. I just can't get past paying an extra quarter for a mc double. I would rather go to Burger King . Oh well maybe they will come to their senses and go back. I would go back if they did that. Jmo

  • Report this Comment On December 16, 2013, at 12:27 AM, oatesatm wrote:

    "... And every evolution was designed to make sure that we stay relevant with our customer base. ..."

    I always love when companies try to convince us that higher prices and/or less product is what the customer has been looking for.

  • Report this Comment On December 16, 2013, at 3:12 AM, broncosfan18 wrote:

    #1 put the fries back on the dollar menu

    #2 get rid of that nasty chicken sandwich

    #3 do not put the onion burger on the menu

    #4 forget the BBQ burger

    #5 forget the ranch burger

  • Report this Comment On December 16, 2013, at 3:50 AM, VintageV12 wrote:

    I love those little double cheeseburgers. I walk over with my dogs, and get them one to share.

  • Report this Comment On December 16, 2013, at 11:54 AM, throwintre wrote:

    Who feeds their dog McDonalds?

  • Report this Comment On December 16, 2013, at 12:52 PM, lfdsls wrote:

    #1 their fries are gross, keep them off the menu

    #2 chicken selection > beef patties. need more selections

    #3 kudos on the onion burger

    #4 need BBQ chicken because BBQ burger is A+

    #5 Need more Ranch burger selections

  • Report this Comment On December 16, 2013, at 1:22 PM, dennyy wrote:

    The dollar menu is supposed to be what it says it is .....$1.00....not $2.00 ...not $5.00....come man...

  • Report this Comment On December 16, 2013, at 3:11 PM, taobabe wrote:

    I go there mostly for their coffee. They have surprisingly good coffee (and this is coming from a person who roasts her own coffee at home).

  • Report this Comment On December 16, 2013, at 3:44 PM, ponchoman49 wrote:

    Well naturally McGreedy's had to pretty much eliminate there dollar menu. They need to keep up there record profits somehow.

  • Report this Comment On December 16, 2013, at 10:04 PM, ccjs wrote:

    We were getting our 4 basset hounds a $1 McDouble once a month and tonight we found they had gone up. Poor basset hounds - no more McDoubles. Tqco Bell or Burger King for the hounds now. Bad, bad mistake McDonalds.

  • Report this Comment On December 17, 2013, at 2:51 AM, jelly13 wrote:

    " This has steadily eaten into McDonald's margins over the years and begun to cause angst among franchisees."

    Yeah, but paying their CEO over $19 mil a year isn't causing ANYONE angst, right?

    Let's do a true analysis here, if we can. Let's see how much raw product prices have REALLY added to their overhead as compared to the compensation of the top echelon of management. I think the results would be very interesting.

  • Report this Comment On December 17, 2013, at 12:04 PM, etester wrote:

    I'd like to see the big shots trade places with some of us 'dirt poor' people for a month. By trading, I mean income as well. Let them try to get by on minimum wage and let us live high on the hog! I wonder if anything would even get through to them?

  • Report this Comment On December 17, 2013, at 3:16 PM, Karaokebill06 wrote:

    McD's lost this guy as a customer due to the "new" menu. That's not a bad thing tho...I have found Wendy's has a dollar menu...and my business!

  • Report this Comment On May 29, 2014, at 1:18 PM, Patti812 wrote:

    McDonald's new dollar menu:

    Very disappointing and a slap in the face for your loyal patrons. And why McDouble from $1 to $1.39. A smaller increase would be more realistic and would not have resulted In a loss of so many of your patrons.

    My work group will be boycotting McDonalds until support to for your lower income patrons is reimplemented.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2763438, ~/Articles/ArticleHandler.aspx, 11/27/2014 7:38:51 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement