Discounting is not surrender—it’s a sophisticated art of making money.

Most companies view discounting as a white flag—signifying an admission that their products failed to sell as expected, leading management to lack enthusiasm for price cuts. My perspective is radically different. Discounting is, at its core, a supremely strategic ‘advance through retreat’: powerful, fast-acting, and instantly deployable. In an era of rising prices and heightened consumer anxiety, failing to master discounting means missing a major opportunity. An effective discounting strategy uses price reductions to attract new customers—but with one critical caveat. Its design must incorporate a ‘firewall,’ whose primary purpose is to prevent (or, more realistically, significantly limit) customers who would otherwise pay full price from jumping on the discount bandwagon. This erosion of profit is the fatal flaw of poorly conceived discounting. The goal is to retain existing customers’ full-price purchases (or even encourage them to buy more), while using discounts to lure in new ones. Executed well, this approach generates additional profit. McDonald’s stands out as an exemplary case of maintaining pricing competitiveness amid inflation and uncertainty. During its Q3 2024 earnings call, executives mentioned the word ‘value’ nearly 80 times—underscoring the importance of pricing-related challenges and opportunities in today’s economic climate. The fast-food chain has rolled out numerous promotions, including $5 meal deals, ‘Buy One, Get One for $1’ offers, pandemic-era ‘Value Meals,’ and newly introduced sub-$3 individual items and $4 breakfast combos. In the quarter ended December 31, 2025, same-store sales rose 5.7%, prompting CEO Chris Kempczinski to emphasize that lower prices are drawing more customers into stores—and to declare unequivocally: ‘McDonald’s will never lose on value or affordability.’ Thoughtfully crafted discounting boosts profits; haphazard discounting erodes them. Ask yourself: ‘How much deliberate thought do we invest when issuing discounts?’ Be clear-eyed: a company’s true profit often resides precisely in the ‘last few dollars’ of its pricing. Thus, every discount comes directly out of your bottom line. In Q4 2025, the average net profit margin for S&P 500 companies stood at 13.2%. Offering a 10% discount casually is anything but trivial. The art of discounting lies in knowing precisely when—and how—to cut prices to drive new sales and increase overall profitability. Five Effective Discounting Strategies The essence of effective discounting is reducing prices to meet customer needs. This article focuses on five key opportunities. 1. Serving customers who value the product less than its listed price While pursuing graduate studies in upstate New York, I studied many pricing theories. Yet perhaps the most impactful lesson I learned came not in class—but outside it… at a liquor store. Above its checkout counter hung a sign: ‘Ask me about discounts.’ Naturally, I asked. The cashier enthusiastically explained that by joining their (free) club, I’d receive a 5% discount on all purchases—and an additional 5% off when buying a full case. Puzzled, I asked, ‘Why doesn’t everyone just sign up?’ His insightful reply: ‘Because not everyone cares about price.’ That’s a vital lesson everyone should grasp. Ask yourself: Do you always hunt for discounts on every purchase?

With McDonald’s raising prices four times in three years, is the ‘broke-person meal’ becoming exclusive to the middle class? ‘Burgers are shrinking while prices rise faster than inflation.’

It’s not only Chinese consumers being ‘boiled alive.’ Down under in Australia, budget-conscious customers have noticed that a Big Mac now costs A$1.60 (≈US$8) more in-store—and A$2.35 (≈US$11) more for delivery—compared to 2019. In the U.S., McDonald’s largest market with over 13,000 locations, workers have long voiced dissatisfaction. As early as 2022, American ‘broke people’ sued McDonald’s, alleging that advertised burgers were 15–20% larger than those actually served—a case that later escalated into a class-action lawsuit. To appease American budget-conscious customers, U.S. McDonald’s revived its ‘American Broke-Person Meal’ in 2024—the $5 Meal Deal, offering a burger, fries, chicken nuggets, and a soft drink for $5, priced 15% cheaper than buying each item separately, and available only during limited-time promotions each year. This November, the U.S. ‘broke-person meal’ upgraded to an $8 version, including 10 chicken nuggets, fries, and a beverage. ‘Is this really cheap anymore?’ Americans began questioning McDonald’s as prices kept climbing. As Fortune magazine reviewed McDonald’s recent U.S. price hikes, it found that menu-item prices rose an average of 40% between 2019 and 2024—blamed, predictably, on ‘rising costs.’ Foreign media outlets have even singled out McDonald’s, stating outright: ‘Its price increases exceed the average inflation rate.’ Take the U.S. market as an example: the annual U.S. dollar inflation rate from 2015 to 2025 was 3.17%, meaning a $1 item in 2015 would cost $1.37 in 2025. Yet McDonald’s McChicken, priced at $1 in 2018, soared to $3.10 by 2025—a 210% increase. The ‘Double Quarter Pounder with Cheese,’ hailed as ‘the perfect burger,’ surged 285% over 11 years. U.S. Broke-Person Meal Even the Big Mac combo—which saw a comparatively modest 27% hike from 2019 to 2024—still outpaced average inflation. In other words: a 50-cent increase may seem trivial, but relentless annual hikes add up—after all, even dripping water can pierce stone. As McDonald’s raises prices methodically, American budget-conscious customers vote with their feet. Data shows that U.S. households earning under $45,000 visit McDonald’s less frequently. CEO Chris Kempczinski acknowledged this trend, attributing it to customers no longer perceiving McDonald’s as ‘good value.’ By contrast, in China, bolstered by devoted ‘McDonald’s Gate’ fans, McDonald’s continues spinning ever more compelling narratives. Its Q3 2025 earnings report showed revenue of $7.08 billion—up 3% year-on-year, slightly below the market expectation of $7.095 billion—while same-store sales in international franchised markets (including China) rose 4.7%. Whether driven organically by consumers or strategically amplified by McDonald’s marketing, the brand has successfully aligned itself with office workers over recent years—evolving from a treat reserved for top exam scores into bona fide ‘worker fuel.’ Like Coca-Cola, it’s become joyful comfort food for the budget-conscious. ‘You only truly appreciate McDonald’s broke-person meal after starting your first job,’ a colleague in our editorial department mused. Faced with CBD lunch prices routinely hitting $30, McDonald’s remains one of the few places where you can eat freely and affordably.

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