McDonald’s Has Finally Solved the Value Menu Equation | The Motley Fool

Back when McDonald’s (NYSE:MCD) began offering its Dollar Menu, franchisees complained that it drove down their margins. The problem was that the menu offered extensive $1 choices that made it too easy for customers to construct a full meal from it for just a few bucks.

Now, after multiple tries, it appears the fast-food chain has found the right mix with its $1, $2, $3 value menu. This new strategy is, according to CFO Kevin Ozan’s remarks in the company’s last earnings call, part of why comparable-restaurant sales rose by 2.9% in the United States in the first quarter.

“Sales were fueled by higher average check, driven by two primary factors: menu price increases as part of a broader strategic pricing reset of the menu board, and favorable shifts in product mix, consisting of trade-up to new premium products and a higher number of items per order for $1, $2, $3 Dollar Menu transactions,” he said.

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McDonald’s Has Finally Solved the Value Menu Equation.