How $3 Became the New $1

We used to care about the dollar deal.

Now it’s tough to find.

Fast Food Value Meals

Fast food has always offered us value:

Value History

As recently as the Great Recession, $1 was the fast food value meal price point. Offered in 2008 (and echoing what had existed since 2002), the McDonald’s “Dollar Menu” included the McChicken sandwich and McSkillet breakfast burrito. But after franchisees complained that they could not profit off a $1 double cheeseburger, it soon was replaced by the McPick 2 that had a rather short life from 2015 to 2016. At that point, the McPick 2 for $2 became a McPick 2 for $5. As you might expect, it too did not last for very long.

Explained by McDonald’s, with the McPick 2, you could mix and match two items for $2 like a McDouble with a small fry or a McChicken with an order of Mozzarella Sticks:

Leaping to now, McDonald’s again realizes that customers are asking for lower prices. Its answer will soon be the $3 menu that reputedly will include a sausage biscuit for breakfast and (I assume at all times) a 4-piece Chicken McNuggets. Meanwhile, at Taco Bell, we can already order from a $3 menu that has 10 items priced from $1.19 to $2.99.

I guess we can say that $3 is the new $1.

Our Bottom Line: Reference Points

Looking at fast food value prices, a behavioral economist might take us to the reference points that we use as a judgment tool. When the price of a gallon of gasoline rises from $4.00 to $4.25, we think $4.25 is expensive because $4.00 is our reference point. However, our outlook changes when the price sinks from $4.50 to $4.25. Then the new price seems less objectionable because of a new reference point.

Somewhat similarly, one dollar used to be a reference point for fast food value; now it’s $3.

My sources and more: Today, we began with this Axios post. From there, we found more detail on the $3 meal in the Restaurant Business newsletter. And, as for our history, the facts were at Eater, Renaissance Marketer, and Mashed.