McDonald’s Seeks to Regain Consumers through Value Deals

After facing a difficult second quarter, McDonald’s executives are shifting their focus towards recapturing consumers by offering attractive deals to entice them back to their restaurants. U.S. President Joe Erlinger acknowledged that the fast-food chain has had trouble convincing diners of its affordability, and he anticipates continued challenges in the industry throughout the year.

Long-Term Strategy

Erlinger emphasized the importance of taking a long-term approach to addressing these issues and regaining their position as a leader in value and affordability. He stressed that it will require sustained and coordinated efforts to demonstrate to customers that McDonald’s is on their side. This shift in strategy is aimed at reversing the negative narrative surrounding the brand and rebuilding momentum for the future.

Despite missing analysts’ estimates in the latest financial report, McDonald’s remains optimistic about its ability to bounce back from the setbacks. Same-store sales declined across all segments, including the crucial U.S. market, indicating a need for corrective action. Erlinger admitted that the company fell short in certain areas, such as declining guest counts and check averages. However, he noted that there have been positive signs with the value meal launch, particularly among low-income consumers.

To capitalize on the initial success of the $5 value meal promotion, McDonald’s plans to extend the offer in most of its U.S. markets. The decision to prolong the promotion was met with positive feedback from the majority of franchisees, indicating a willingness to invest in the value offering. This move is seen as a way to drive traffic back to McDonald’s restaurants and improve the overall profitability of the business.

McDonald’s executives are collaborating closely with franchisees to ensure the success of the value meal extension and other future offerings. They acknowledge the financial strength of franchise owners and are working together to assess the impact of these initiatives on the business. By working in partnership with franchise operators, McDonald’s hopes to navigate through the competitive challenges and emerge stronger in the coming months.