MCDONALD’S BETS ON CHEAPER CHICKEN SANDWICHES TO SPUR DEMAND

When McDonald’s Corp rolls out its new crispy chicken sandwich line on Feb. 24, it will swap out a higher-priced premium chicken sandwich from its menu, the company confirmed to Hilary Russ of Reuters.

McDonald’s three new sandwiches – all with a larger fillet and new potato bun – will start at $3.49 and top out at roughly $4.69, depending on the region, according to a US franchisee who spoke on the condition of anonymity and a Credit Suisse analyst.

Soon to disappear from the menu: The more expensive Buttermilk Crispy Chicken Sandwich, which usually costs around $5.

McDonald’s menu swap follows several years of declining customer traffic at its US locations.

The last year in which guest visits rose was 2017, when they increased by 1%, according to annual financial filings.

The pricing strategies illustrate how the world’s biggest restaurant brand stands to make more money selling higher quantities of a cheaper product than lower quantities of a more expensive one.

That scheme has long helped McDonald’s beat competitors and is especially relevant as millions of Americans remain out of work because of the coronavirus pandemic.

Amid consumer frenzy for chicken, McDonald’s forthcoming sandwiches represent one of its most significant menu changes since it switched the Quarter Pounder to fresh beef in 2018.

The company has said the sandwiches are precursors to even more new chicken items as McDonald’s looks to regain customers who flipped to Popeyes, a unit of Restaurant Brands International Inc. and Chick-fil-A. Both rivals charge about $3.99 for their fried chicken sandwiches.

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