As fast-food chains fight to keep value meals cheap, McDonald's offers $5 McMuffin, $8 Big Mac deals

By Charles Passy

Consumers don't consider it a deal if prices cross into double-digit territory, experts say

Fast-food chains are increasingly competing with sit-down chains that offer meal deals for around $10.

When does a fast-food meal feel like a deal? Apparently, when it's $10 or under. Or even $5.

Such value pricing is critical when it comes to wooing consumers these days, according to restaurant-industry professionals and analysts. And it may explain why some chains are promoting offers for combos - with a sandwich, side item and drink - priced at such low levels.

The latest example? McDonald's (MCD) will be introducing "Extra Value Meals" at the $5 and $8 levels, with a range of popular items, including the Sausage McMuffin and Big Mac. Prices vary depending upon the combo's offerings.

"We've been working hard to make our meals more affordable, giving you the food you love at a price that hits the spot," McDonald's said in a statement.

Deals abound elsewhere. Penn Station, an Ohio-based sandwich chain, is now offering a sandwich-and-fries combo for $7.99; normally, the two items would run more than $10 together.

And some establishments are really testing how low they can go. Checkers and Rally's, a chain of drive-through restaurants already known for its value pricing, has now gone as far as offering a $4 combo meal with a sandwich, fries, drink and dessert.

It's no secret why consumers want value right now: Prices for dining out have gone up dramatically in recent years and are continuing to rise. The latest consumer-price index data show a 3.8% uptick in the category of "food away from home" over the past 12 months. That's higher than the overall rate of inflation, which stood at 2.7%.

Traditionally, consumers could always find bargains when it came to fast food - it wasn't so long ago when McDonald's had a dollar menu, after all. But over time that started to change, as evidenced by a 2025 LendingTree survey that found the average fast-food meal had crept up to $11.56 and nearly reached $14 in San Francisco, the priciest metro area for dining.

Meanwhile, consumers suddenly had the option of lower-cost meals at some sit-down chains. Most notably, Chili's (EAT) introduced a $10.99 deal in 2022 with a main dish, starter and beverage.

"It's a better dining experience for roughly the same money," said Robin Gagnon, co-founder and chief executive of We Sell Restaurants, a dining-industry broker.

Put it all together, and staying under $10 has become increasingly critical in the fast-food realm.

"It's like a psychological ceiling," said Aaron Anderson, a restaurateur who's behind some franchise concepts.

That's a point seconded by Mark Kalinowski, a veteran fast-food analyst. "Anytime you go up in cost by adding a digit, that's not a good thing," he said of that line between $9 and $10.

The challenge, of course, is that when restaurants go below a certain level, it puts pressure on their margins. And it's an especial challenge for fast-food establishments versus sit-down, casual-dining ones, experts say. Chili's may sell a $10.99 meal, but it likely also hopes that $10.99 customer might order an alcoholic beverage or a dessert, and thus increase their check total.

With fast food, there's typically no alcohol on the menu and a limited number of other options to upsell the customer.

Not that chains don't have ways of making it work, industry professionals note. Larger chains can benefit from volume discounts with vendors, for example. And even if profit margins become smaller, the increased sales that deals may drive can help offset the difference.

Plus, chains can upsell in some ways. Checkers and Rally's Chief Marketing Officer Scott Johnson notes the company promotes bigger versions of its combos - so the $4 meal can be had in a $5 "medium" iteration, and a $6 "large" one. Diners might also opt to buy something beyond the combo.

"When you get consumers at your location, there's a good chance you can cross-sell them on other items," Johnson said.

Craig Dunaway, chief operating officer of Penn Station, goes so far as to suggest that while a deal may attract people to come in, in many cases they forego the bargain and stick with their usual favorite - at full price.

At the same time, Dunaway says you can't ignore the cost of discounting.

"We're making money - but we're making less money," he said.

-Charles Passy

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09-02-25 1237ET

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