McDonald's dollar menu wakes up

Fast food giant McDonald's is spicing up the breakfast market with rumors about a national dollar menu hitting stores next year.

The Chicago Tribune and The Wall Street Journal report that they have documents suggesting that advertising for the breakfast deals is likely to begin in January. McDonald is not confirming its intentions, but the move could help the company lure back customers on a thin budget.

For the quarter ending in October, the company on Tuesday reported a one-tenth of 1% decline in same store sales in the United States., although it fared pretty good overall. The dollar menu, its Angus burger and McCafe offerings helped the burger Goliath from falling further in sales.

McDonald's is not alone in its misery. Quick service restaurant breakfast sales were flat for the quarter ending in August, according to the NPD Group. Rising unemployment and declining disposable income is killing the appetite of the breakfast industry.

There's more grim news. A recent study by AlixPartners LLP show that consumers plan to spend $11.49 per meal eaten out in 2010, almost a 20% dip from the average spending per meal reported in a March survey.

The economy is forcing many fast food chains to slash menu prices. For McDonald's, an expansion of the dollar menu could be the key to keep the cash registers ringing at least in the near future.

So, what could a dollar get you for breakfast? McDonald's has been testing a dollar menu in Chicago and few select markets offering items such as sausage biscuits, hotcakes and McMuffin. We could expect a nationwide roll out of that, or maybe the company would add on to the existing offerings.

Whatever it is, with rival Dunkin' Donuts recently airing plans of 99 cent meals, the price war seems to have only begun.