McDonald's killed the Dollar Menu - here's what it's doing instead

McDonald's is offering a new promotion reminiscent of its former Dollar Menu.

The "McPick 2" deal will let customers select two of the following items for $2: a McDouble, a McChicken, small fries and mozzarella sticks.

The promotion returns sandwiches to the $1 price point of the Dollar Menu.

The deal is the start of a broader value platform that McDonald's is planning to roll out next year, the company told Business Insider.

The fast-food chain killed the Dollar Menu two years ago and turned it into the "Dollar Menu & More." The name change went along with a price hike.

Whereas everything on the Dollar Menu had previously cost $1, the "Dollar Menu & More" contained items that cost up to $5.

The shift upset some customers, according to McDonald's CEO Steve Easterbrook.

"Some of the challenges we've had in the US have been somewhat self-inflicted," Easterbrook said during a conference call in July. "We moved away from the Dollar Menu and didn't replace it with significant enough value in the eyes of consumers."

McDonald's is hoping the new "McPick 2" excites those value-seeking customers, who account for about one quarter of the fast-food chain's total visitors, according to executives. Nation's Restaurant News first reported on the McPick 2 menu.

The new promotion will run nationally for five weeks starting January 4. At the end of the five weeks, franchisees will have the option to extend the promotion.

A number of other fast-food chains have also started running promotions in the $1 to $5 range recently.

Wendy's recently started offering a "4 for $4" meal that includes a junior bacon cheeseburger, four chicken nuggets, small fries, and a drink, all priced at $4.

Burger King is also lowering prices.

The chain has been offering a 10-piece chicken nugget deal for $1.49, as well as coupons for other items through its mobile app.

Meanwhile KFC has been offering a $5 "Fill Up" meal that includes an entree, a drink, several sides, and a dessert - all for $5.

The meal is largely responsible for recent sales growth at KFC, according to Citi Research analysts.

The rush of promotions indicates that despite lower gas prices and signs of an improving economy, customers are still demanding deep discounts from fast-food chains.

Excessive discounts are hurting the companies' profits, however, so all four chains are pricing promotions a little higher than in the past.