The Holiday Pie is a seasonal dessert offering from McDonald’s that is available for a limited time during the holiday season. It provides a festive pie option on the McDonald’s menu alongside the classic apple and cherry pies. For consumers interested in enjoying a Holiday Pie from McDonald’s this season, the key question is: how much does this seasonal treat cost?
Overview of the McDonald’s Holiday Pie
The Holiday Pie was introduced by McDonald’s back in 2016. It has returned for the holiday season every year since then. The Holiday Pie features a sugar cookie crust filled with vanilla custard. It is topped with rainbow sprinkles and drizzled with white icing. The Holiday Pie provides a fun, whimsical dessert option in keeping with the festive spirit of the holidays.
Some key facts about the McDonald’s Holiday Pie:
– Available seasonally – Usually appears on menus in mid-November and is available through the end of the year
– Limited time offering – After the holidays end, the Holiday Pie is removed from the menu
– Individual portion – Each Holiday Pie is a single-serve portion designed for one customer
– Festive treat – With its decoration of sprinkles and icing, the Holiday Pie looks like a mini Christmas dessert
– Vanilla custard filling – Provides a rich, creamy filling between the sweet cookie crust
Pricing History of the Holiday Pie
Since its debut in 2016, the pricing of the McDonald’s Holiday Pie has remained fairly steady year over year. Here is a look at the pricing history:
2016 – Introductory price of $1.00
2017 – Price increased to $1.19
2018 – Remained at $1.19
2019 – Bumped up to $1.39
2020 – Went up to $1.59
2021 – Held at $1.59
Based on its history, the price of the Holiday Pie has gradually increased over the years but typically only goes up incrementally each year it is offered. Most recently in 2021, the price remained unchanged from the prior year.
Current 2022 Holiday Pie Pricing
For the 2022 holiday season, the McDonald’s Holiday Pie is priced at $1.79. This represents a moderate price increase from the $1.59 price point in 2020 and 2021. The new $1.79 price was effectively as of mid-November 2022 when the Holiday Pie returned to participating McDonald’s locations across the country.
At $1.79, the current pricing places the McDonald’s Holiday Pie in the lower price tier of dessert offerings on the menu. It is priced similarly to other single pie options like the baked Hot Fudge Sundae pie. It is more expensive than cookies like the Chocolate Chip Cookie but less expensive than premium offerings like the McCafé Bakery items.
The $1.79 price point makes the Holiday Pie an affordable indulgence. It remains under $2, keeping it within reach as an impulse buy for customers seeking a festive, seasonal treat alongside their meal at McDonald’s. The price is positioned as wallet-friendly to attract holiday diners.
Factors Impacting the Holiday Pie Price
There are a few key factors that directly impact the pricing set each year for the McDonald’s Holiday Pie:
Ingredient Costs
Like all food products, the ingredients that go into making the Holiday Pie have associated raw material costs. Fluctuations in commodity prices for ingredients like sugar, flour, eggs and dairy can drive up production costs. If McDonald’s faces higher ingredient expenses, some of that cost may get passed onto customers through a slightly higher retail price for the pie.
Labor Costs
Labor represents another cost factor in preparing and serving the pies at McDonald’s locations. Wage rates for bakery staffing and workers serving the pies impact overhead. Rising minimum wages in many states also contribute to higher labor costs. The price charged for the Holiday Pie factors in some portion of total labor expenses.
Supply Chain Issues
Disruptions in the supply chain that complicate food production and distribution tend to drive costs up. This has especially been the case during the pandemic. Any supply chain hiccups that make it more expensive for McDonald’s to source ingredients and get pies to its restaurants will also influence pricing. The company balances keeping the pie affordable for customers while covering elevated supply chain costs.
Demand Forecasting
McDonald’s puts significant analysis into forecasting sales and consumer demand for promotional items like the Holiday Pie. The price point is strategically set based on projections for how many pies will sell at various potential price points. The goal is to maximize sales and profits, while ensuring pies remain attractive to customers at the established price.
Competitive Landscape
Like with any menu item, McDonald’s also considers the competitive environment when pricing the Holiday Pie each year. Key competitors like Burger King, Wendy’s and Dunkin’ have their own holiday pie offerings. While McDonald’s doesn’t want to start a race to the bottom on pie pricing, keeping prices relatively aligned with competitors ensures its pie remains a viable value proposition for customers.
Marketing Budgets
Since the Holiday Pie is a limited-time promotional menu item, there is a marketing budget associated with advertising it. The higher the marketing spend to promote the pie, the greater the volume of pie sales McDonald’s needs to justify that advertising investment. Finding the right balance between pricing and promotion allows the company to recoup its marketing dollars spent on the Holiday Pie.
Holiday Pie Pricing Strategies
McDonald’s leverages different pricing strategies and considerations when setting the retail price for the Holiday Pie each holiday season:
Price Skimming
The “price skimming” technique involves initially pricing a new product high and then gradually lowering the price over time. McDonald’s used this strategy when it first launched the Holiday Pie in 2016 at $1.00. It has incrementally raised the price over the years as the pie gained popularity.
Psychological Pricing
The purpose of psychological pricing is to make an item seem more financially appealing to buyers. McDonald’s pricing of the Holiday Pie ends in .99 cents to give the illusion that it is cheaper than it is. A $1.79 price seems more attractive than rounding up to $1.80.
Loss Leader Pricing
Loss leader pricing means selling a product below cost to stimulate other profitable sales. McDonald’s may use this strategy to draw customers in for a Holiday Pie in hopes they will also purchase a full meal or other items at higher margins.
Bundle Pricing
Bundling the Holiday Pie as part of a discounted combo deal is another approach. Offering the pie at a lower price point when combined with a Big Mac in a meal bundle incentivizes larger orders.
Value Pricing
Since the Holiday Pie is a temporary menu item, McDonald’s focuses on setting a value price that seems reasonable to customers. A value price presents the pie as a great buy relative to its benefits of providing a special holiday treat.
Customer Segment Pricing
The low price point for the Holiday Pie allows McDonald’s to appeal to price-conscious customer segments. A $1.79 pie is affordable for most budgets, letting customers enjoy the novelty of the seasonal item.
Pricing Impacts on Holiday Pie Sales
The pricing set each year for the McDonald’s Holiday Pie has direct impacts on sales volumes and profitability:
Price Elasticity of Demand
Consumer demand for the Holiday Pie is price elastic, meaning sales respond directly to changes in pricing. Higher prices lead to fewer pies sold, while lower prices increase unit sales. McDonald’s aims for an optimal price at the peak of the demand curve.
Profit Margins
Since the Holiday Pie is a low-priced product, McDonald’s relies on high sales volumes to drive profits. The profit margin per pie is modest. So maximizing pie sales through strategic pricing allows stores to realize greater overall profitability.
Holiday Budgets
The limited-time availability around the holidays means the pie appeals to seasonal shoppers. An attractively priced Holiday Pie fits more consumers’ holiday budgets compared to pricier desserts.
Impulse Purchases
When priced under $2.00, the Holiday Pie becomes an impulse buy. Low-priced impulse items boost incremental sales compared to shoppers’ planned purchases alone.
Brand Perception
Affordable pricing contributes to McDonald’s brand image as a go-to for value. Holiday Pie prices aligned with this wider value proposition keep customers perceiving the McDonald’s brand favorably.
Cost Control
If production and ingredient costs rise unexpectedly high, McDonald’s may preserve margins by raising Holiday Pie prices or shrinking pie sizes. Cost control is vital to maintaining profit outlooks on the pie.
Conclusion
The McDonald’s Holiday Pie delivers seasonal cheer on the menu for a limited time each holiday season. While pricing on the pie has gradually risen from its $1.00 debut in 2016 to its current $1.79 price point in 2022, it remains an affordable indulgence. McDonald’s strategically prices the Holiday Pie using techniques like psychological pricing and value pricing to drive sales volumes that deliver business profitability. At under $2.00, the Holiday Pie offers customers a chance to enjoy a festive seasonal treat as part of McDonald’s accessible value proposition. Careful pricing considerations help keep the Holiday Pie priced “just right” as a special part of McDonald’s holiday menu.
| Year | Holiday Pie Price |
|---|---|
| 2016 | $1.00 |
| 2017 | $1.19 |
| 2018 | $1.19 |
| 2019 | $1.39 |
| 2020 | $1.59 |
| 2021 | $1.59 |
| 2022 | $1.79 |