McDonald’s new value menu is falling flat with customers.
The fast-food giant reported U.S. comparable sales growth of just 0.8% in the second quarter, down sharply from 2.5% in the same period a year earlier. The company also announced a leadership change in its U.S. business: Skye Anderson will take over as president from Joe Erlinger, effective Tuesday.
McDonald’s has spent the past couple of years testing value-focused offerings, including a $5 meal deal. It’s far from alone—chains from Chili’s to Burger King have similarly leaned into lower-priced menus as customers grapple with lingering inflation, layoffs, and economic uncertainty.
In April, the company launched another value menu featuring 10 items priced under $3 each, including the Sausage McMuffin and the McDouble. But the rollout struggled, CEO Chris Kempczinski said on Tuesday’s earnings call. Only 60% to 65% of restaurants adopted the menu exactly as designed by corporate. Some franchisees used the promotion to raise prices on cheaper items by folding them into the deal.
“There’s not nearly as much wiggle room that you have when it’s a $5 meal deal,” Kempczinski noted.
At the same time, McDonald’s piled on promotions during the quarter—the under-$3 menu, World Cup offers, and KPop Demon Hunters-themed meals. The volume proved overwhelming for customers, the CEO said. The company also scaled back digital discounts that loyal customers had come to rely on.
“It’s something that’s valued by our most loyal customers,” Kempczinski said. “That ended up being a bad trade.”
He did not detail next steps for the value menu but told analysts he would have “a better answer” at the company’s investor day later this year. Executives plan to meet with franchisees next month to discuss value offerings.
“We don’t have a strategy problem,” Kempczinski said. “We simply didn’t execute at the level we needed to in the second quarter.”
