Key facts
- McDonald's is reevaluating its value menu strategy.
- The company experienced a slowdown in US sales growth.
- Issues cited include reduced digital discounts and a difficult rollout of new value offerings.
- Executives acknowledged execution problems in the second quarter.
McDonald's is facing significant challenges with the cheapest items on its menu and is reconsidering its approach to value-priced options. Executives revealed on the company's second-quarter earnings call that multiple issues contributed to a recent slowdown in US sales growth. CEO Chris Kempczinski pointed to a reduction in digital discounts, which alienated loyal customers, and difficulties in rolling out a new under-$3 value menu to restaurants. Additionally, the chain ran too many promotions concurrently, including special World Cup meals and new beverage launches.
Kempczinski emphasized that the company does not have a strategy problem but rather an execution issue that impacted the second quarter. McDonald's faces considerable competition from rivals offering deals on inexpensive burgers.