The fast-food giant aims to entice customers who have been deterred by inflated prices and opt to eat more meals at home.

Starting from June 25, McDonald's will offer diners a choice between two items - either a McDouble or a McChicken sandwich - accompanied by small fries, a small soft drink, and a four-piece Chicken McNuggets, all for just $5. This value deal will run for a month and is part of the company's strategy to provide nationally advertised affordable options for its customers.

McDonald's faced criticism when some locations started charging as much as $18 for a Big Mac meal and $7.29 for an Egg McMuffin. Like other industry peers, the company had to increase prices by mid- to high-single-digit percentages due to the rising costs of items like eggs. Additionally, price hikes were implemented in California after the state imposed a $20-an-hour minimum wage for fast food workers.

Acknowledging the importance of providing value to customers, a McDonald's spokesperson emphasized that offering such affordable meals has been a core aspect of the company's mission. This move comes as part of McDonald's efforts to combat slowing sales growth, particularly among lower-income diners.

The decision to introduce the $5 combo meal stems from the recognition that all income groups seek value in their spending habits. As McDonald's CEO Chris Kempczinski stated during a recent post-earnings call, consumers are becoming more discerning with their spending, prompting the need for attractive promotions.

McDonald's missed quarterly profit estimates for the first time in two years, partly due to budget-conscious consumers overlooking its offers. The company's global sales growth has been steadily slowing for the fourth consecutive quarter, reaching 1.9%. In contrast, other fast food chains, such as Restaurant Brands International (owner of Burger King) and Domino's Pizza, have reported better-than-expected results by focusing on value menu items.

In the United States, McDonald's first-quarter same-store sales grew at a slower rate of 2.5%, compared to a robust 12.6% growth in the previous year. International licensees witnessed a decline of 0.2% in comparable sales, offsetting positive trends observed in regions such as Japan, Latin America, and Europe.

McDonald's shares rose 0.8% following the announcement of the $5 combo meal promotion. The company aims to regain its competitive edge and attract a wider customer base, particularly those seeking affordable dining options amidst a cost-of-living crisis.