McDonald's emphasizing value offerings to help customers navigate rising inflation
What's the story
McDonald's Corporation is preparing for a difficult 2025, as the company expects continued financial strain on its lower-income customers. The fast-food giant's CEO, Chris Kempczinski, made this prediction at a recent event at the Boston College Chief Executives Club. As consumers' wallets tighten, Kempczinski stresses the importance of a strong value proposition across all markets and hints at possible changes to their menu offerings.
Sales downturn
1st quarterly sale drops in 4 years
In July, McDonald's posted its first quarterly same-store sales decline in nearly four years. The decline was blamed on lower consumer spending amid stubborn inflation. To counter this, the company launched a limited-time $5 meal deal in June and is looking at additional changes to its value offerings. Kempczinski said they anticipate consumers to stay financially strained for a few more quarters.
Menu strategy
McDonald's considers chicken as cost-effective alternative to beef
As part of its strategy to offer more affordable meals, McDonald's is also considering a shift toward chicken-based products. Kempczinski noted that chicken is less expensive than beef and has seen a surge in popularity recently. He revealed that "beef is more than twice as expensive as chicken on a per-pound basis," making it easier for the company to provide value through chicken items.