Fast food has become so pricey that even items on McDonald’s “McValue menu” are too expensive for many low-income families, according to a report.
The chain introduced the “Dollar Menu” in the early 2000s – on which all items cost $1 – at a time when McDonald’s core customers were low-income households.
However, it eventually became a “Dollar Menu & More,” and prices continued to swell, eventually turning the burger chain’s original clientele away, the Los Angeles Times reported.
McDonald’s chief executive Christopher Kempczinski told investors last week that while the number of low-income households visiting restaurants dropped by double digits, the fast food chain has gained nearly as much traffic from high earners.
“Happy Meals at McDonald’s are prohibitively expensive for some people, because there’s been so much inflation,” analyst Adam Josephson said.
Josephson and other economists told the Times that the drop in lower-income customers eating at the Golden Arches reflects a larger trend: Wealthier Americans are spending more freely, while those on smaller budgets are tightening the purse strings.
Prices at limited-service restaurants, including chains like McDonald’s, are up 3.2 percent year over year – at a rate higher than inflation, which currently sits about 3 percent. The prices at fast food restaurants are expected to continue to increase, according to Marisa DiNatale, an economist at Moody’s Analytics.
Price hikes, due to the Trump administration’s tariffs, disproportionately affect lower-income Americans since they spend more of their incomes on goods than services, which are not directly impacted by levies, according to the report.
“It has always been the case that more well-off people have done better. But a lot of the economic and policy headwinds are disproportionately affecting lower-income households, and [McDonald’s losing low-income customers] is a reflection of that,” DiNatale said.
The average price of a McDonald’s menu item rose 40 percent from 2019 to 2024, according to a company fact sheet. The price of a Big Mac in 2019 was $4.39 – but rose to $5.29 in 2024. A 10-piece McNuggets Meal, which includes a drink and fries, went from $7.19 to $9.19 during that same time period.
McDonald’s says these increases are in line with current costs of running a restaurant, including paying for expensive products like beef and workers’ wages. McDonald’s said last year that its spending on salaries had gone up by about 40 percent since 2019, while food costs were up 35 percent.
Even as costs go up, the company’s chief financial officer, Ian Borden, said on a recent earnings call that McDonald’s has kept expenses from getting too out of control.
“I think the strength of our supply chain means our beef costs are, I think, certainly up less than most,” he said.
Last year, McDonald’s tried to appeal to deal-savvy customers, offering a McDouble or McChicken sandwich, small fries, a small soft drink and a four-piece McNuggets for $5.
In January, it also launched a $1 menu item alongside a full-price item.
The tactics seemed to pay off, with McDonald’s reporting a 2.4 percent lift in sales during its recent third-quarter earnings.
McDonald’s new Extra Value Menu, which launched in the U.S. in September to attract customers deterred by rising fast-food prices, likely played a role in bringing back customers.
The return of the beloved Snack Wraps, a fan-favorite order that vanished from the menu nine years ago, has also helped to boost sales in recent months. The wraps cost $2.99 each.
There was a 15 percent surge in U.S. store traffic on the day the Snack Wraps were rereleased, according to Placer.ai data.
While other promotions like an $8 Big Mac meal or $5 Sausage McMuffin haven’t drawn customers nearly as much, according to the data, customers have returned for various special promotions. Most recently, the chain saw an influx for a 50-cent double cheeseburger on September 18 to celebrate National Cheeseburger Day.
