McDonald’s may generate a slight profit from its $5 meal deal, though it is expected to be minimal. According to restaurant analyst Mark Kalinowski, the fast-food chain could see profit margins ranging from 1% to 5%, translating to approximately $0.05 to $0.25 per meal sold.
Kalinowski noted that this meal deal is a strategy for McDonald’s to attract price-sensitive consumers dealing with inflation, encouraging them to make additional purchases once inside the restaurant.
Profitability, however, relies on several factors, including the cost of ingredients, labor, and other overhead expenses. Arlene Spiegel, president of Arlene Spiegel & Associates, described the $5 offering as “more promotional than profitable.”
Even if the deal draws customers back, franchise owners, who account for about 95% of McDonald’s locations, may not benefit. These owners establish their own pricing and manage various costs, including rent, insurance, permits, and taxes.
In May, Joe Erlinger, president of McDonald’s U.S., mentioned that franchisees often implement promotions like the $5 meal deal to offset their overhead expenses. However, Spiegel pointed out that once additional costs such as labor, packaging, condiments, delivery, and marketing are included, franchise owners often “wipe out any profit on any one or all of the items in the deal.”