Ex-McDonald’s Chef Discusses the Financial Strategy Behind the $5 Meal

A former McDonald’s chef gained widespread attention after revealing how McDonald’s $5 meal deal was a strategic move for the company, even though it may result in a loss of profits.

Chef Mike has gained a significant following on TikTok for his content centered around McDonald’s. Typically, his videos feature the restaurant’s recipes, in which he demonstrates to viewers how to replicate some of their most beloved menu items.

Additional videos provide customers with tips on locating the ideal substitute for some of McDonald’s most iconic menu items, such as their hash browns.

Despite previous opinions, Mike explained to his viewers in his recent video why McDonald’s decision to release their $5 meal deal in June was a clever strategic move for the chain.

@chefmikeharacz
Former #mcdonalds corporate chef talks about them being OK losing money. #McDonaldsTikTok #mcdonaldssecrets #mcdonaldsccsing #mcdonaldschallenge #mcdonaldshacks #mcdonaldsdrivethru #fastfood #fastfoodstories #fastfoodlife #FYP #food #foodfestontiktok #tiktokfood #foodtiktok #foodtok

♬ original sound – Chef Mike Haracz

“He started by saying that McDonald’s is comfortable with losing money. He explained that in the QSR restaurant industry, there is a concept known as “share,”which refers to the limited number of customers that visit a restaurant in a day to make a purchase.”

During either lunch or dinner, there is a group of individuals who will be visiting a restaurant to purchase food. McDonald’s goal is to ensure that these individuals choose their restaurant over any competitors. They aim to increase their portion of the overall market in this industry.

He reiterated, “Although they may only make five cents on their value meal, they are still willing to take the loss. Their strategy is to attract customers who have not visited McDonald’s in a while, which ultimately leads to profit.”

Mike concluded that their hope was to have repeat customers returning.

After Mike’s video was shared, numerous individuals were swift to concur, stating: “Earning five cents on the value meal does not constitute a loss. While it may not be as profitable as desired, it is still not a loss.”

Another person agreed that having a long-term perspective is more beneficial than focusing on immediate profits.

One person wrote in, stating: “I only purchase the special deals at fast food restaurants. I never pay full menu prices.”

Other fast food chains, including Popeyes, Pizza Hut, Wendy’s, and Burger King, have also introduced their own value meals this year, making McDonald’s not the first to do so.