Some McDonald's Restaurants Stop Selling $1 Drinks

Your next trip to McDonald's may cost you a few extra bucks. Some Golden Arches locations have reportedly started to ditch the fan-favorite $1 drink option from menus, marking just the latest change to hit consumers' wallets amid record-breaking U.S. inflation. The $1 drink option began as a summertime promotion around 2008, with McDonald's promoting the deal year-round since 2017.

The move, first reported by The Wall Street Journal, is reportedly being seen in 16 of 56 U.S. markets, which have begun to advertise value meals instead of $1 drinks. Some of those markets have even dropped the $1 drink promo altogether, instead choosing to raise the price of sodas. McDonald's is said to have given owners permission to drop the $1 drinks promotion in January, with a limited number of franchisee groups shifting to market value as of May. However, the $1 drink promotion is still available in the majority of U.S. markets.

"Customers can always count on McDonald's for great value, which remains an important part of our marketing strategy," McDonald's said in an emailed statement to Restaurant Dive. "Franchisees set prices and have the flexibility to create promotions that will drive demand locally."

The decision to raise beverage prices largely has to do with offsetting the impact of sustained food inflation. According to The New York Times, U.S. inflation in June is expected to have reached a new four-decade high. It is believed that prices in June rose 8.8% from June 2021, the fastest pace since 1981, amid soaring gas prices, rising rents, and increased grocery bills. McDonald's had indicated in in its most recent 10-Q that inflationary pressures were a threat to the company's bottom line.

McDonald's is not alone in changing menu prices in response to inflation. During its fourth-quarter earnings call in March, Chief Financial Officer GP Plosch hinted that Wendy's could possibly raise prices later in 2022. Discussing the company's 2022 outlook and future plans, Plosch confirmed, "Yes, we are pricing over 5% in 2022. That gets us to double-digit pricing on a two-year basis, and it's clearly providing a tailwind for us on the [same-restaurant sales] number." Meanwhile, Little Caesars earlier this year raised the price of its Hot-N-Ready pizza deal by 55 cents.