CEO Admits Trouble – Price War Reloads

Wooden blocks spelling 'PRICE' with arrows indicating increase and decrease — Photo: FAMILY STOCK / Shutterstock

McDonald’s is bringing back cheap eats after watching customers walk past the drive-thru for a third straight quarter.

Quick Take

McDonald’s is testing two new value-menu formats at about 1,900 U.S. restaurants over eight weeks.
CEO Chris Kempczinski announced the test on the company’s November 4 earnings call after weak third-quarter traffic.
The formats include mix-and-match bundles and fixed-price bundles, with a possible national rollout in early 2027.
The move echoes McDonald’s 2002 Dollar Menu playbook, which helped the chain recover from a sales slump.

A Familiar Problem Brings Back an Old Fix

McDonald’s just posted a rough third quarter, and fewer people showed up at U.S. restaurants to prove it. On the company’s November 4 earnings call, CEO Chris Kempczinski told investors the chain needed a sharper answer for budget-minded customers. His fix sounds simple: cheaper, clearer deals. But getting that right, without hurting franchisees’ bottom lines, has tripped up McDonald’s before.

Kempczinski did not speak in vague terms. He said McDonald’s “began an eight-week test of two new everyday affordable price menu constructs across all day parts in about 1,900 restaurants across a handful of regions”. That is roughly 40% of the chain’s U.S. footprint, a test big enough to produce real data, not just a feel-good pilot program in a handful of test markets.

Two Formats, One Goal: Simpler Pricing

The test covers two distinct ideas. One is a mix-and-match bundle, letting customers pick their own combination of items for a set price, built to feel familiar to past deal-seekers. The other is a fixed bundle, a locked-in combo with no substitutions, aimed at customers who want a fast, predictable price without decision fatigue.

Early reporting suggests one possible bundle could pair a McChicken sandwich with other budget items at a set price point. However, the exact lineup is still being tested and could change before any wider rollout. McDonald’s has not committed to final pricing or a confirmed national menu. Kempczinski framed early 2027 as the target window for a broader launch, pending results from the current test.

Why Now: Traffic Problems Meet a Discount War

McDonald’s is not moving in isolation. Fast-food chains across the industry have leaned into discounting as inflation-weary customers cut back on eating out, and competitors have rolled out their own combo deals to grab market share. Kempczinski wants McDonald’s to offer what he called a “clear and compelling value proposition,” language that signals the company sees pricing confusion, not just high prices, as part of the traffic problem.

McDonald’s plans to introduce new value-oriented meal bundles early next year after a disappointing third quarter. https://t.co/zk506x1Q6C

— FOX5 Las Vegas (@FOX5Vegas) November 7, 2026

History Offers a Warning Along With the Playbook

McDonald’s has run this exact play before. Back in 2002, during a brutal sales slump, a franchisee-driven push led to the original Dollar Menu, a line of items priced at just one dollar. It worked. Same-store sales improved in the years that followed, and the Dollar Menu became, as one franchise insider put it, “the linchpin of the last turnaround in its U.S. business.”

But cheap items carry a cost. Dollar Menu purchases made up an estimated 13% to 15% of U.S. sales at their peak, drawing in traffic and encouraging people to add pricier items to their orders. Rising food and labor costs eventually made the math brutal for franchise owners, and McDonald’s dropped the original Dollar Menu, replacing it with tiered pricing instead. Some franchisees even pushed back hard against later value plans, arguing the discounts squeezed their margins without boosting profits enough to offset the lower prices.

That tension, traffic versus profit, sits at the center of McDonald’s new test. A good value menu pulls customers through the door. A bad one trains them to expect bargains forever while squeezing the franchise owners who actually run the restaurants. McDonald’s leadership knows this history better than anyone, which is likely why they are testing two formats carefully instead of rushing one plan nationwide.

For now, the eight-week test will run its course, and McDonald’s will decide what, if anything, deserves a national launch. Customers in the test regions get a preview of what cheaper fast food might look like heading into 2027. Everyone else has to wait and see which bundle wins.