An ex-McDonald’s chef went viral after explaining how McDonald’s $5 meal deal was the perfect move for the company even if it ultimately means losing out on money.
Chef Mike is well known on TikTok for his content surrounding McDonald’s. More often than not, his videos surround the chain’s recipes, where he shows fans how to recreate some of the most popular dishes at the chain.
Other videos tell customers where to find the perfect dupe for some of the most iconic foods at McDonald’s, like their hash browns.
In one of his latest videos, however, Mike told viewers why McDonald’s $5 meal deal released this June was a smart move for the chain.
“McDonald’s is okay losing money,” he began. “There is a term in QSR restaurant business called share, and that means that there are only a certain amount of people a day who are going to a restaurant to order something.”
“So at lunch or at dinner, there’s a total number of people going to a restaurant to order food. They (McDonald’s) want to make sure that if anyone is going to a restaurant, they are not going to the competitor. They want more share of the overall business out there.”
He continued: “So they are willing to lose money, because maybe they only make five cents on their value meal… well, they’re hoping that somebody comes back to McDonald’s who hasn’t been there in a long time, and that’s profitable.”
“They’re hoping they’re gonna have repeat customers coming back,” Mike concluded.
After the video was posted, many were quick to agree with Mike, writing: “Making five cents on the value meal is not losing money. It’s not making as much as they want, but it’s not losing any.”
“The big picture is always better than short sighted gains,” another concurred.
One wrote in saying: “I only buy the special deals at fast food places. I never go and pay menu prices.”
McDonald’s isn’t the first fast food chain to bring out a value meal this year. Popeyes, Pizza Hut, Wendy’s, and Burger King all have their own versions of a value meal.