McDonald’s could see some profit from its $5 meal deal, although it is expected to be modest. According to restaurant analyst Mark Kalinowski, the profit margin for this combo meal is estimated to be between 1% and 5%, translating to approximately $0.05 to $0.25 for each bundle sold.
Kalinowski noted that this meal deal is part of McDonald’s strategy to attract inflation-weary consumers and encourage them to spend more than just the $5 on additional menu items. However, the profitability of the deal depends on several factors, including the costs of ingredients, labor, and overhead expenses.
Arlene Spiegel, president of consulting firm Arlene Spiegel & Associates, characterized the $5 meal deal as “more promotional than profitable.” She highlighted that just because the deal may draw customers back to the restaurant, it does not guarantee that franchisees will benefit from the profits.
Approximately 95% of McDonald’s locations are franchisee-owned, leading individual owners to set their prices and manage costs such as rent, insurance, permits, and taxes. In May, McDonald’s U.S. president Joe Erlinger indicated that franchisees often introduce promotional offers like the $5 meal deal to help offset these overhead costs.
However, according to Spiegel, the meal bundle functions more as a “loss leader” aimed at attracting and retaining customers. When additional expenses such as labor, packaging, condiments, delivery charges, and marketing are considered, she explained that owners “essentially eliminate any profit from the deal.”