McDonald’s CEO Warns of Declining Fast-Food Sales
McDonald’s Shows Resilience Amid Economic Struggles, But Challenges Remain
McDonald’s has long been considered a resilient player in the fast-food industry, especially during economic downturns. Thanks to its reputation for affordability and comfort food appeal, the chain often becomes a go-to option when consumers cut back on dining expenses. While pricier meals might be off the table, many customers can still justify the cost of a Big Mac or a Value Meal.
The company also weathered the COVID-19 pandemic better than many competitors, having already invested in the technology and infrastructure to support delivery and takeout. While those upgrades weren’t made with a pandemic in mind, they proved invaluable.
However, resilience does not mean immunity.
During McDonald’s third-quarter earnings call, CEO Chris Kempczinski addressed growing concerns over slowing industry traffic and shifting consumer behavior.
“In our last call, we noted a slowdown in the quick-service restaurant (QSR) sector across several major markets. This trend continued in the third quarter, particularly among low-income consumers who are increasingly choosing to eat at home,” he said.
Kempczinski expressed disappointment with the company’s recent performance.
“QSR traffic remains under pressure, and while we anticipated headwinds in 2024, our performance so far has not met expectations.”
Still, the CEO emphasized accountability, noting that external market conditions aren’t an excuse for falling short.
“While the industry has slowed, we know there are many factors within our control. We remain focused on driving results through our Accelerating the Arches strategy.”
Despite the challenges, Kempczinski pointed to bright spots, especially in the U.S. market.
“We’re encouraged by momentum in Q3, including strong value offerings, menu innovation, and effective marketing that boosted engagement with core items,” he added.
McDonald’s is doubling down on value as a core part of its strategy, after acknowledging it may have lost ground to competitors in one of its most defining areas.
CEO Chris Kempczinski admitted that McDonald’s no longer holds the same clear advantage in value perception that it once did.
“We’ve often been recognized as the value leader among our competitors, but that leadership gap has narrowed,” he said during the company’s latest earnings call.
In response, McDonald’s is taking swift action, working closely with franchisees to enhance its value offerings across key global markets.
Recent initiatives include €4 ($4.38) Happy Meals in France, “Three for £3” ($3.90) deals in the U.K., and $1 coffee (USD $0.70) promotions in Canada. These targeted price points are part of a broader global push to reassert McDonald’s value proposition.
“We believe good value includes both entry-level items and full meal bundles at affordable prices,” Kempczinski explained.
This approach is organized under a global value strategy called “Every Day Affordable Price” (EDAP) menus. These platforms feature a variety of low-priced items—typically including breakfast items, beef, and chicken sandwiches.
To further strengthen this value perception, McDonald’s plans to pair EDAP menus with compelling meal bundles.
“Blending EDAP and meal bundles into a branded value platform allows us to invest in long-term recognition and customer loyalty,” he said. “When people think of affordable food, we want McDonald’s to be the first name that comes to mind.”
