A McDonalds located on Santa Monica Blvd in Los Angeles, California, April 1, 2024.
Robert Gauthier | Los Angeles Times | Getty Images
McDonald's is working to introduce a value meal option in U.S. stores to help offset the increasingly challenging environment for consumers, two people familiar with the matter told CNBC.
People said the $5 meal could consist of four items: a McChicken or McDouble, four-piece chicken nuggets, fries and a drink. The budget meal was first reported by Bloomberg News.
The potential new offering comes at a time when low-income consumers are starting to pull back their spending, especially at fast-food brands. According to data from Bank of America, the number of mentions of low-income consumers in business income is at the highest level in almost two years. Executives from McDonald's to Wendy's Unpleasant Dave and Buster's all have noted the restraint in spending.
McDonald's recently reported a mixed first quarter, with U.S. same-store sales slightly below expectations. Higher prices helped average checks grow, but some consumers pushed back due to the higher costs.
“Consumers continue to discriminate with every dollar they spend as they face higher prices in their everyday spending, putting pressure on the economy. [quick-service restaurant] industry,” CEO Chris Kempczinski said on the company's April 30 earnings call.
He added that McDonald's must be “laser focused” on affordability to attract diners.
On the call, Kempczinski said the company is working toward a national value agreement in the U.S., and the company's Chief Financial Officer Ian Borden said the U.S. leadership team is working closely with owner-operators in this environment. McDonald's companies and franchisees, who operate 95% of McDonald's locations and respond to such promotions, often disagree over promotions that could eat into owners' profits.
An initial proposal from McDonald's for a $5 meal has not cleared necessary hurdles, and additional details are now being discussed, according to a person familiar with the process. a second person said Coca-Cola marketing funds added to the equation to sweeten the deal.
McDonald's declined to comment to CNBC. Coca-Cola did not immediately respond to a request for comment.
— CNBC's Amelia Lucas contributed to this article.