It looks like McDonald’s has seen all the posts about how fast food prices are too damn high.
What happened: In an attempt to win back cost-conscious consumers who have cut McDoubles from their diet, McDonald’s Canada has locked in a year-long price drop to its McValue Meal menu, lowering the cost of the budget bundles from $5.99 to $5 flat.
The chain is also adding four breakfast combos to the menu and lowering the price of a small coffee to $1.
Why it matters: While this is good news if you like McD’s coffee (which, honestly, is pretty decent), it’s a rather bad sign for the wider restaurant industry. Cost-of-living concerns have forced diners to eat out less at every type of restaurant, not just fast food joints, but most eateries don’t have the purchasing power and flexibility to drop prices like McDonald’s does.
Big picture: A new TD Bank report found that two-thirds of Canadians plan to pare back spending this year, up from 51% a year ago, and the top reported budget sacrifice was eating out. Under these circumstances, it’s sadly unsurprising that a new study projects 4,000 Canadian restaurant closures this year.
Our take: Recession indicator is an overused term these days — and likely inaccurate as many project Canada to dodge a recession again this year — but the McValue menu price drop feels like it fits that descriptor. At the very least, it’s a sign of bad economic vibes.—QH