Name: The Real Reason McDonald's Soft Drinks Are Only $1
Uploaded: 2020-05-09T21:01:20.000Z
Duration: 4 min 47 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Lots of fast-food enthusiasts agree that McDonald's has the best-tasting soda fountain Coca-Cola of any chain.

Adverbs of degree

So, it's no surprise if you've ever stopped by a location just to get a medium Coke and maybe an order of fries, too.

It turns out McDonald's and Coca-Cola go way back to the very beginning of the burger chain.

When the duo partnered, Coca-Cola helped develop a specialized method for storing the soda in stainless steel tanks that protect the syrup from temperature and light, and McDonald's adopted this same method.

The water flows through insulated tubes to ensure you get the coldest, best Coca-Cola available.

Between those extra steps and extensive water filtration, it's easy for McDonald's to serve up surprisingly fresh, crisp Coke that keeps customers coming back.

Today, McDonald's deals for 1 USD include more options than getting a soda in any size.

Customers can get hot or iced coffee for the same price, and on Fridays, the chain also offers a free medium fry with any 1 USD purchase by Mobile Order and Pay.

The McDonald's dollar menu might be reduced to mostly just drinks these days, but there's a good reason for it.

With the introduction of 2 for 5 USD menus, and similar options for set periods of time, the chain ends up actually making more money.

Even with the 1 USD drink menu alone, Reuters reported sales rose, as did shares of stock.

According to Fortune, the chain smashed expectations with its 1 USD drink promotion and saw nearly a 4 percent increase in sales.

CNBC cited the success of that quarter following the 1 USD drink menu and 2 USD coffee menu as the push behind the introduction of the 1, 2, and 3 USD dollar menu in early 2018.

USA Today reports that the updated menu and even new technology to modernize and streamline the process at the stores have been a profitable success, and the chain believes its strategy of tiered pricing worked to draw customers toward higher-priced items.

"Well it's called the McPick 2 menu, customers are going to be allowed to pay two bucks for two of the following items, be allowed to pay, you get to do this."

So the next time you stop in for nothing more than a medium Coke, keep in mind the smell of those fries or a burger just might be working hard to win you over for a larger order.

With prices so low, how do fast food chains make any money at all?

Well, one way the dollar menu becomes profitable is through scale.

With employees focused on making a large quantity of these items rather than high-quality, customizable products, it winds up cutting costs, according to the BBC.

It also helps that soft drinks make up a large portion of McDonald's dollar menu, and even better, Payscale says filling cups from automated soda fountains requires almost zero labor from employees who are paid around the federal minimum wage.

The truth of the matter is that these restaurants make their money with promotions and marketing tricks.

"Stay cool while you check things off your summer bucket list."

"Like summer, any size soft drinks for a dollar won't stick around long."

Customer Survey Assist says one example is the free menu items that are offered from time to time.

Those free items generally end up costing you money because they must be made with a minimal purchase, and even a single dollar purchase can add up over thousands and thousands of customers.

Many chains are more than willing to do away with their dollar menus, but the low prices often get frugal customers inside the door.

Eat This reported that one study shows people will order and eat 85 percent more food when offered directly from another person, like your server.

However value menus have grown over the years to include much more than your standard burger, fries, and sodas.

According to Time, while a smaller, more manageable menu with easy-to-make items might turn a decent profit, new value menus with as many as 25 items are nearly impossible to make money on, which is why some restaurants might consider dropping the menus altogether.

One of the few highly profitable products on the dollar menu, though, are soft drinks.

Those large Coca-Colas are what make the value menu all worth it.

The Motley Fool reported that soft drinks can bring in up to a 90 percent profit margin, which really adds up in the eyes of the restaurant.

And according to AOL, fast food restaurants like McDonald's are able to cash in a bunch on their any size 1 USD soft drinks, because each one costs them less than a quarter.

Somewhere between 5 to 20 cents to be exact.

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