Here's why the Dollar Menu is working so well for McDonald's

  • Menu price hikes helped fuel higher check averages at McDonald's during the first quarter.
  • Same-store sales got a bump from increased purchases of McDonald's premium products and the number of items ordered at one time from the Dollar Menu.
  • McDonald's rolled out its $1 $2 $3 Dollar Menu in January.

It seems that a rise in the price of burgers at McDonald's didn't scare away customers in the first quarter.

The burger giant said Monday that menu price increases fueled higher check averages in the U.S., leading to 2.9 percent bump in same-store sales growth and McDonald's 11th consecutive quarter of positive growth in this area.

During the company's earnings call, Chief Financial Officer Kevin Ozan said that sales were bolstered by customers opting for McDonald's premium products, its pricier Signature Recipe Burgers, and an increase in the number of items ordered at one time, particularly from its Dollar Menu.

These sandwiches cost between $5 and $7, on average, depending on your location and are on par with the prices at other chains in the better-burger category like Shake Shack and Five Guys.

McDonald's rolled out its $1 $2 $3 Dollar Menu in January. At the time, a number of McDonald's U.S. franchisees said they were worried this and other promotions would drive checks lower and reduce their ability to control menu prices. But it appears that wasn't the case.

According to Ozan, McDonald's customers use the Dollar Menu in two distinct ways. Some create a meal using different items from the three price points while others will purchase a regular combo meal and add onto the order with an item from the Dollar Menu.

People who use the $1 $2 $3 Dollar Menu tend to purchase more items than people who do not order from it, McDonald's CEO Steve Easterbook said on the call Monday.