Get ready for a Big Mac at a little price.
McDonald's Corp. plans to lower prices for some of its large sandwiches, including the Big Mac, to just 55 cents with the purchase of fries and a drink over the next year.
The move takes aim at competitors such as Wendy's International and Burger King, which have been luring customers away with cheaper fare.
McDonald's spokesman Jack Daly said the first price cuts could come "within months," although they likely will be sooner since franchisee approval was expected by Friday.
Wall Street braced for a price war that could send profits plunging. Burger King and Wendy's said they don't plan to slash prices, but they may be forced to do so to stay competitive, said analyst Allan Hickok at Piper Jaffray in Minneapolis.
"If 55 cents ends up being the price point that sticks, then I can guarantee you the other fast-feeders will have an item at 55 cents," Hickok said. "Otherwise, they will see a lot of their customers in competitors' parking lots."
McDonald's earlier this year quietly began cutting prices of some products as it looked to stimulate declining sales. But the new cuts would significantly raise the stakes in the highly competitive U.S. fast-food business.
At least one McDonald's Franchisee, Chuck Gonzales, who owns two restaurants in San Francisco, opposes the price-cutting plans, saying it could easily drive many operators out of business.
Burger King, the nation's second-largest fast-food chain, has offered a 99-cent Whopper for nearly three years. It recently boosted its advertising to highlight that fact as it successfully lures consumers from McDonald's.
Wendy's International has already said it will not cut prices on its hamburger sandwiches in response to McDonald's.
"Wendy's does not intend to engage in the hamburger price wars," spokesman Denny Lynch said. "We believe you win customers by consistently offering a better product at an everyday value," he said.
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