Value and price are not the same thing.
You could, for example, buy five broken-down cars for $1,000 each, and that’s not automatically as good a value as one reliable automobile for $5000.
In the fast-food world, value becomes even trickier. Subway might sell a foot-long sub for $5, but given the quality of that product you might be much better off buying a $10 sandwich at a local eatery.
Related: Chipotle responds to bankruptcy, store closure reports
A major part of value is perception. If people feel as if they are getting a good deal, then they are getting a good deal.
It’s much like how many Americans see inflation. People who are having a hard time generally believe that prices have increased much more than they have. That makes sense because if you are struggling, every small increase hits harder.
McDonald’s (MCD) has struggled in the value game for many years. The chain’s prices are relatively low, but it fell behind rivals like Wendy’s, which heavily marketed its Four for $4 and $5 Biggie Bag deals.
Perception has been a major issue for the chain, and Chief Executive Chris Kempczinski has pledged to fix it.
💰💸 Don’t miss the move: SIGN UP for TheStreet’s FREE Daily newsletter 💰💸
McDonald’s has offered special deals through its app.
McDonald’s/TheStreet
McDonald’s pushes the idea of value
The CEO has specifically talked about value during the past few earnings calls.
“We’re encouraged by signs of progress in the third quarter and the more consistent market share traction we are seeing, especially in the U.S., which included strong, compelling value platforms,” the executive said.
That, he said during the chain’s third-quarter earnings call, is “fundamental to the McDonald’s brand promise; menu innovation, which excited our customers with great-tasting food; and strong marketing prowess that drove engagement on higher-margin core items.”
McDonald’s has not only talked about value but has taken some steps to deliver it.
“We have spoken before about our customers recognizing us as the value leader versus our key competitors, but our value leadership gap has shrunk,” he said. “In response, we have moved with urgency in partnership with our franchisees to improve our value offerings in most of our major markets.”
He cited examples that launched in the quarter: the 4-euro ($4.33) Happy Meals in France, three for 3 UK pounds ($3.88); and in Canada what the CEO called “price-pointed coffee, starting at just $1 (US$0.70).”
And Kempsczinski wants to make clear that value is not just something for fringe menu items.
“As we have said before, we view good value as including both entry-level items and meal bundles at affordable price points,” he said. “This means offering Every Day Affordable Price menus, or EDAP, in our markets.
“At McDonald’s, we define EDAP as a platform with an assortment of items all priced at compelling entry-level price points, generally including breakfast beef and chicken sandwich options.”
McDonald’s adds new U.S. value meal
He continued: “We will pair EDAP platforms with strong meal bundles to provide our customers with entry-level meals at affordable price points. Blending EDAP and meal bundles under a branded value platform allows us to invest in and build recognition and affinity with our customers.
“So when they’re thinking about an affordable option for food, we’re top of mind, which is why we’ve been able to capitalize on branded equities like Loose Change in Australia and the Saver platform in the U.K. for over 10 years.
“McDonald’s looks to take a lead in the fast-food value game with the introduction of the new $6 Daily Double Meal deal at select locations,” according to a report from Fast Food Post.
That’s fairly similar to deals offered by Wendy’s and Burger King.
“As part of the deal, you can get a Daily Double burger along with an order of small World Famous Fries, a 6-piece Chicken McNuggets, and a choice of drink, all for a suggested price of $6 (may vary),” the site reported.
Related: Popular delivery app wants you to finance lunch
While not one of the chain’s better-known sandwiches, the Daily Double is a hearty offering.
“With 490 calories per serving, the Daily Double features two seasoned, 100% beef patties and melty American cheese topped with shredded lettuce, tomatoes, slivered onions, and mayo on a perfectly toasted bun,” according to the site.
You can find the $6 Daily Double Meal deal at select participating McDonald’s locations across the country for a limited time.
