Reuters reports McDonald's new 'dollar' menu to intensify price war in 2018.

McDonald’s dropped its popular “Dollar Menu” in 2013 after franchisees groused that selling items like a double cheeseburger for $1 cut into profits. The replacement “Dollar Menu & More” had higher prices, but failed to draw more customers despite heavy marketing.

The new dollar menus, set to debut on Jan. 4, include any size soft drinks and cheeseburgers for $1, small McCafe drinks and bacon McDoubles for $2 and Happy Meals and triple cheeseburgers for $3, McDonald’s said.

Elsewhere, Taco Bell regularly rotates the roughly 20 items on its $1 value menu. Subway, which made a huge splash a few years ago with its “$5 foot-long” special, is now offering a variety of six-inch sandwiches for $2.99 each.

Dunkin’ Donuts also is brewing up more value offers after franchisees warmed to the idea of using deals in their fight to win breakfast.

The strategy is not without risks, said Goldin, who noted that rising food and labor costs could squeeze franchisees who bear the brunt of such cost increases.

“They are really stuck in a value trap,” Goldin said. “There is going to be tremendous pressure to raise prices.”

Where's the Value?

"All of the value menus are designed to protect franchisee margins", the McDonald’s said.

If the "value" meals preserve profits, where is the value?

Any size soft drink for $1 is no value. The markups are enormous, as are the calories unless someone orders a diet drink.

RECOMMENDED ARTICLES

Consider the McRib? Do you know what's in it? Here's a hint: "‘Restructured Meat’ from Pig Heart, Tongue, Stomach."

Click on the link for more details. Yum, indeed.

Enter the Fed

Meanwhile, rest assured the Fed does not want the consumer to get any value either.

The Fed will not be happy with non-value, value menus, whether there is any value or not (and there isn't).

Mike "Mish" Shedlock

Food: What's In Your Basket? How Fast Are Prices Rising?

The BLS says the CPI rose 2.1% in December from a year ago. Food rose 1.6%. I called the BLS and filled in some numbers.

What's in Your Beef? 22 of 25 Fast Food Restaurants Flunk Antibiotics Test

McDonald’s and 21 other fast-food chains received failing grades for not implementing policies to curb antibiotics.

Oil Price War and Liquidity Crisis Coming

Saudi Arabia kicked off an all-out oil war on Saturday, Some expect oil at $36 when the futures open at 5:00PM Central.

Debate Over Food Inflation: What's the Real Story?

Is food a bargain or are prices rising far faster than the BLS says they are?

YouGov Factors In The Brexit Party Alliance

The Brexit Party will not field candidates in seats won by the Tories in 2017. A new YouGov Poll calculates the impact.

Big Jump In Coronavirus Deaths Coming Up?

The pool of severe cases keeps rising. Most of the death counts will come from this pool.

Amidst Inflation Scare, Price War intensifies between Costco, Target, Walmart

You're not imagining things. Stuff is a little bit cheaper at Costco, Target, Walmart, and Kroger this year.

Senate to Consider Healthcare “Skinny” Bill: Can It Pass? What’s In It?

A new healthcare proposal is gathering steam in the Senate. It’s dubbed the “skinny” bill.

Wisconsin Price Police Say Meijer Doesn't Charge Enough for Dog Food

Wisconsin officials cracked down on Meijer for not charging enough for dog food, bananas, Cheerios, and school supplies.