McDonald's new 'dollar' menu to intensify 2018 price war

Food and Beverage Reuters

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McDonald's Corp <MCD.N> said on Monday it will introduce new menus with $1, $2 and $3 items in early January as restaurants battle to win U.S. customers who have come to expect deals on food.

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The move from McDonald's comes amid an intensifying fast-food price war with rivals ranging from Taco Bell <YUM.N> to Dunkin' Donuts <DNKN.O>.

McDonald's dropped its popular "Dollar Menu" in 2013 after franchisees groused that selling items like the McDouble cheeseburger for $1 cut into profits. The replacement "Dollar Menu & More" had higher prices, but failed to draw more customers despite heavy marketing.

The new dollar menus, set to debut on Jan. 4, include any size soft drinks and cheeseburgers for $1, small McCafe drinks and bacon McDoubles for $2 and Happy Meals and triple cheeseburgers for $3, McDonald's said.

They will supplement McDonald's current value offers such as McPick 2 for $5. All of the value menus are designed to diners flexibility while protecting franchisee margins, the company said.

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"You always have to have value as part of the equation," Chris Kempczinski, president of McDonald's USA, said in an interview.

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McDonald's executives in October said almost all of its U.S. operators support its ongoing turnaround plan that includes the new value menus.

(Reporting by Lisa Baertlein in Los AngelesEditing by Marguerita Choy)

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