McDonald’s (MCD) is acknowledging that its recent value meal push created more confusion than customers among bargain-hungry diners across the United States.
Company executives admitted the chain rolled out too many overlapping offers, including a $3-and-under menu and $5 bundled meal deals, muddling its overall message.
The competing promotions left customers and franchise operators uncertain about which deals to prioritize, undermining the campaign’s core intent from the start.
Comparable U.S. sales grew just 0.8% in the most recent quarter, falling short of analyst estimates calling for a 1.06% rise.
That figure marks a significant slowdown from the 2.5% comparable sales growth the company posted in the same period a year earlier.
Global comparable sales rose 1.3%, also well below the 3.8% jump recorded during the same quarter in the prior year.
CEO and Chairman Chris Kempczinski pointed directly to inconsistent execution across the franchise system as a central failure of the promotional strategy.
“The 10 items for under $3 [promotion] has not delivered against our expectations. Part of that was due to the fact that we’re getting really inconsistent execution,” Kempczinski said.
Only about 60% to 65% of the McDonald’s system was executing the recommended pricing architecture tied to the 10-items-for-under-$3 promotion at any given time.
“We simply didn’t execute at the level we needed to in the second quarter,” Kempczinski said in a statement, offering a blunt assessment of the quarter’s shortcomings.
The disappointing results triggered a leadership shake-up inside McDonald’s U.S. segment, with veteran company employee Skye Anderson set to immediately take over as division president.
Her predecessor, Joe Erlinger, who held the position for over six years, will transition into an advisory role through early next year.
Industry observers were quick to weigh in on the results, with Restaurant Business editor-in-chief Jonathan Maze calling it “a bit of a damning earnings call” in a post on X.
Retail analyst Bruce Winder noted the value push was designed to win back low-income customers who have pulled back on spending amid persistent economic pressures.
“They’re continuing to see a weakness in that demographic, just based on elevated fuel prices we’ve seen because of the conflict in the Middle East and other upward inflationary pressures, particularly in the U.S. market,” Winder said.
McDonald’s now faces the challenge of simplifying its value proposition while still competing aggressively for budget-conscious consumers in an increasingly difficult spending environment.
