OAK BROOK, Ill. -- McDonald’s Corp. plans to offer $1 sodas and $2 McCafe specialty drinks nationwide beginning in April. The new beverage promotions will join McDonald’s recent two-for-$2 and two-for-$5 deals in an effort to highlight price-oriented value to customers.
In the wake of slowing restaurant traffic industrywide and its nixing of its Dollar Menu, McDonald’s has been retooling its menu and marketing message in favor of new value-positioned offerings; beverages will be the next platform it will promote. This spring, soft drinks of any size will be priced at $1. For a limited time, customers can also buy small McCafe drinks, including smoothies and frappes, for $2. McDonald’s will support the promotion with national advertising.
The strategy aims to create “noticeable changes” for customers, Adam Salgado, vice president of U.S. marketing for McDonald’s, told Bloomberg.com.
“It’s adding another layer of great value for customers with more choices,” he said.
McDonald’s competitors are making their own moves to appeal to value-conscious consumers. Wendy’s Co. is continuing its four-for-$4 meal deal, which bundles a cheeseburger, nuggets, fries and a drink. Also, Starbucks Corp. and Dunkin’ Donuts both promote rewards programs that offer free and discounted food and drinks.
McDonald’s acknowledged that its customer will always be on the hunt for deals. “We know that there are budget-conscious consumers out there,” Salgado said. “Value will always be a part of our strategy.”
Industry watchers agree that beverage promotions can be an effective way to leverage a value message. Beverages are “some of the highest-margin products, so they can probably afford to do it,” Peter Saleh, an analyst for New York-based BTIG LLC, told Bloomberg.com. Gross margins for drinks can be as high as about 90%, while food is usually about 65% to 70%, according to Saleh.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.