McDonald’s $5 Meal Deal: A Recipe for Profit or Loss?

McDonald’s is expected to see a modest profit from its $5 meal deal, with profit margins estimated between 1% and 5%, translating to about $0.05 to $0.25 per bundle sold, as reported by restaurant analyst Mark Kalinowski.

Kalinowski noted that this deal is part of McDonald’s strategy to attract inflation-weary consumers back into their restaurants, with the hope that once inside, customers will purchase additional items beyond the $5 offer.

However, profitability will depend on various factors, including the costs of ingredients, labor, and overhead expenses. Arlene Spiegel, president of Arlene Spiegel & Associates, described the $5 meal as “more promotional than profitable.”

While the promotion may draw diners to the restaurant, it doesn’t guarantee that franchise owners will share in those profits, as approximately 95% of McDonald’s locations are franchise-owned. This means franchisees set their own prices and deal with extra costs such as rent, insurance, permits, and taxes.

In a previous statement, McDonald’s U.S. president Joe Erlinger indicated that franchisees utilize promotional offers like the $5 meal deal to mitigate their overhead expenses. Nonetheless, Spiegel emphasized that the bundle often serves as a “loss leader” to attract and retain customers, suggesting that once costs for labor, packaging, condiments, delivery, and marketing are considered, franchise owners may not realize any profit from the deal.

Popular Categories


Search the website