McDonald’s Stock Rises 0.04% as Price Cuts and Promotions Push Trading Volume to 98th Rank

McDonald’s (MCD) edged up 0.04% on August 21, with a trading volume of $0.71 billion, down 41.44% from the prior day, ranking 98th in market activity. The stock’s muted performance coincided with strategic moves by the fast-food giant to address affordability concerns and restore customer trust.

The company announced a 15% price reduction on eight popular combo meals, repricing them below the cost of individual items. These “Extra Value Meals,” priced at $5 and $8, include breakfast combos like the Sausage Egg McMuffin and Big Mac meals, marking a revival of the branding since the pandemic. The initiative aims to reverse declining visits from low-income consumers, a core demographic experiencing double-digit annual drops in patronage, as highlighted by CEO Chris Kempczinski in recent earnings calls.

McDonald’s also introduced app-specific promotions, such as free medium fries with $1 purchases and discounts for new users, to drive engagement. U.S. President Joe Erlinger emphasized that while inflation has driven some price increases, the average Big Mac meal cost $10.53, with high-priced outliers like $18 combos being exceptions. The company’s strategy includes subsidizing franchisees to offset losses from the price cuts, reflecting a calculated trade-off between thinner margins and recalibrating customer perceptions of value.

The move follows social media backlash over affordability, including a viral 2023 tweet showing an $18 Big Mac meal. Erlinger’s May 2024 open letter acknowledged customer frustrations, stating that reports of exaggerated price hikes were “inaccurate.” The rebranding and pricing adjustments signal a broader effort to align with consumer expectations and stabilize the brand’s reputation as a budget-friendly option in a competitive market.

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