Food price inflation has made items on the Dollar Menu less profitable, with the $1 burger especially problematic after last year's droughts , reports Leslie Patton at Bloomberg News .
McDonald's needs to start charging $1.50 or $2 for Dollar Menu items , Peter Saleh, an analyst at Telsey Advisory Group, told Bloomberg .
But McDonald's will have to tread carefully to keep price-conscious customers coming back.
The Big Mac (at an average price of $3.57) is too expensive for many Americans. Instead, McDonald's is promoting its $1 cheeseburger, fries, drinks and wraps, according to the Wall Street Journal.
"Value is critical right now," Lynne Collier, restaurant analyst at Sterne Agee, told WSJ. "The consumer is still very weak, facing higher gas prices, the payroll tax increase and employment barely inching up. Value is the No. 1 driver of traffic, and all these restaurant companies are dying for traffic."
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