McDonald's Says It's Working On More Value Deals Amid Price Complaints
McDonald's is struggling with a value problem nowadays—or at least, that's what many of its customers are saying. A series of viral social media posts have called out the burger giant's prices for Egg McMuffins, Hash Browns, McChickens, and much more over the past year. In an apparent response to these rumblings, McDonald's just previewed plans to roll out more national deals for its value-hungry fans.
The company just released its latest quarterly earnings results, reporting a lower-than-anticipated 1.9% increase in global same-store sales and a 2.5% same-store sales increase in the United States. Value was a key focus in an April 30 earnings call where executives discussed the latest earnings.
CEO Chris Kempczinski said that many consumers are still pulling back on spending as prices remain elevated across the board. He also noted that customer traffic across the whole quick-service restaurant industry was "flat to declining" last quarter in major markets like the United States, United Kingdom, Canada, Australia, Germany, and Japan.
"Consumers continue to be even more discriminating with every dollar that they spend as they face elevated prices in their day-to-day spending, which is putting pressure on the [quick-service restaurant] industry…We know our customers are looking for reliable everyday value now more than ever. That has always been our promise to deliver delicious feel-good moments at an affordable price each and every day."
Kempczinski said that McDonald's already offers value deals at the local level (i.e. they're only available in certain parts of the country), but the chain doesn't currently have a "national value platform."
"So the opportunity for us in the U.S., I think, is to get more aligned in the system around a strong national value proposition that we can then use our media scale to drive high consumer awareness on it."
In other words, McDonald's is looking to start rolling out national value offers in the United States and then market them heavily to its customers. The Golden Arches executive didn't say when exactly they may introduce these deals. However, he did say that the offers may include meal bundles, breakfast deals, and "entry-level" menu items at affordable price points.
McDonald's prices rose by about 10% in 2023, and the chain's California locations have been rolling out additional price hikes this year due to the state's new $20 minimum wage for fast-food workers. During a previous earnings call in February, McDonald's executive vice president and CFO Ian Borden said that price increases will likely slow down in 2024 in conjunction with slowing inflation.
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