Some McDonald’s are dropping dollar drink promotions due to inflation

Even the dollar-dollar drink specials on the McDonald’s menu aren’t inflation-proof.

A number of McDonald’s franchisees are choosing to scrap a long-running promotion offering customers a cold drink of any size for $1 as they face high inflation for decades, a report has found. Some locations have already started raising the price of their drinks by “several pennies” to account for the higher costs.

McDonald’s operators are moving away from the $1 drink special against the recommendation of the fast-food giant’s corporate wing, The Wall Street Journal reported, citing people familiar with the matter.

So far, franchisees in 16 of McDonald’s 56 U.S. markets have decided to focus their advertising campaign on menu prices rather than drink promotion.

The change highlights the debilitating impact of inflation on the bottom line of major US corporations. As noted by The Wall Street Journal, the $1 per drink price was available throughout the Great Recession as well as most of the COVID-19 pandemic.

Earlier this year, McDonald’s reportedly informed its franchisees that the cost of food and paper used in their restaurants would increase by up to 12% on an annualized basis.

The company faces higher costs for basic menu items such as beef as well as labor as it aims to maintain its workforce in a tight labor market.

Inflation rose 8.6% in May, marking the fastest pace since December 1981, according to the Labor Department’s consumer price index. Out-of-home food prices rose 7.4% in May from the same month a year earlier.

“Franchisees set prices and have the ability to create promotions that will drive local demand,” McDonald’s said in a statement.

The Post has contacted McDonald’s for further comment.

The report notes that dollar drink promotions are still being offered in many U.S. markets — and some places that have canceled the deal are sometimes offering it as a limited-time promotion.

McDonald’s business division reportedly informed restaurants in January that they were prepared to suspend the beverage deal if necessary. In May, restaurants were told they could redirect their marketing efforts to focus on the overall value menu.

Overall, McDonald’s raised prices about 8% in the first quarter from a year earlier, company executives said in late April.

The company’s worldwide model sales rose 11.8% for the quarter, beating expectations despite growing financial pressure on U.S. households.

Other major chains that have raised prices in recent months include Starbucks and Chipotle.

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