If you’ve ever been to McDonald’s you know that they are always running different promotions on their food and drinks and that even a dollar can get you a decent snack. They’re currently offering all size soft drinks for a dollar, a hot or iced coffee for a dollar, and if you download their app they have a coupon for a $1 large fry. Yes, fast food is known for being cheap, but a lot of thought actually goes into how they price their menu. Here’s the real way McDonald’s makes the bulk of its money (it’s not the food).
McDonald’s Soft Drink Secret
McDonald’s introduced the one dollar soft drink deal back in 2017. They had been losing sales to competitor fast-food chains such as Wendy’s and Burger King and needed to get more customers in the door. Offering cheap drinks, along with other promotions, got people in their restaurants and buying more than just a $1 drink. I mean how can you resist some salty fries to go along with that coke? According to Fortune, the $1 drink promotion increased sales by almost 4%. The dollar soft drinks, although cheap, actually make them more money.
Following the success of the $1 drink, McDonald’s started the $1, $2 and $3 dollar menu promotion in 2018. The company knew it would get people in the door and get them to hopefully see other appetizing things on the menu and end up buying more profitable items as well. The strategy worked and McDonald’s saw a boost in first-quarter sales. U.S. sales at restaurants open at least a year rose 2.9% for the period and McDonald’s restaurants worldwide saw a 5.5% increase in sales.
Did you know there’s a scientific reason for why McDonald’s fries are so good?
How McDonald’s Is Changing
Along with the tiered menu, McDonald’s has been working to modernize its stores by adding touchscreen systems for people to order on in-store, delivery and mobile ordering hoping to make getting their food more convenient for the average customer to bring up sales.
The $1 soft drink deal brings in a lot of money for McDonald’s and that’s why they continue to keep it on their menu. Soft drinks bring in up to a 90 percent profit margin because each one only costs them less than a quarter. Making their small, medium and large drinks a dollar makes them money and looks good to customers. And think about it, how many times do you see people walk into a McDonald’s and only leave with a drink—pretty rarely. It’s a pretty genius business move. If you don’t know what to get with your $1 drink the next time you head to McDonald’s, try some of their most popular menu items.