McDonald’s sales declined slightly in Q2, but the brand is trying to give guests more bang for their buck to drive traffic.
While prices continue to rise for just about everything, penny-pinching families are trying to stretch those pennies even further.
Brands like McDonald’s—often considered a high-value, low-cost option for consumers—are seeing the impacts of these economic conditions. The franchise expects these trends to continue for the next several quarters.
“The QSR sector has meaningfully slowed in the majority of our markets,” said CEO Chris Kempczinski during McDonald’s Q2 earnings call today. “Industry traffic has declined in major markets like the U.S., Australia, Canada and Germany.”
External pressures like the war in the Middle East are impacting sales in certain markets as well, Kempczinski noted.
“We’re resolved to reignite share growth in all our major markets, regardless of the prevailing market conditions,” he said. “This won’t happen overnight, but it will happen.”
Comparable sales in the United States last quarter fell .7 percent. Systemwide sales decreased by 1 percent.
He acknowledged the brand’s misses as well. “Most notably, our value execution,” he said.
“Consumers still recognize us as the value leader versus key competitors, but it’s clear that our value leadership gap has recently shrunk,” Kempczinski said. “We wrote the playbook on value and we are working with our franchisees to make the necessary adjustments.”
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McDonald’s CEO Chris Kempczinski at the 2023 International Franchise Association conference
In the last two years, the brand implemented a few value-focused offerings worldwide.
Starting in June, McDonald’s offers a $5 deal—with a McChicken or McDouble, plus fries, chicken nuggets and a drink—for customers turned off by increased prices. Value meal sales are ahead of expectations, so the company extended the promotion beyond its initial one-month run. In fact, value meal sales are ahead of expectations. Over 90 percent of franchisees are running the deal through August.
“We remain laser focused on providing value to our customers, this summer and beyond,” U.S. President Joe Erlinger said.
In Germany, the brand rolled out a “McSmart” menu, which includes two sandwiches, fries and a drink for less than €6. The meal deal had record sales in Q1, Kempczinski said.
“It’s this relentless focus on execution that will give customers more reasons to visit our restaurants more frequently,” he said.
The 40,000-plus-unit franchise is testing new products, too, to drive sales. The burger chain is seeing more chicken sales, which are increasing at a faster rate than beef, Kempczinski said. “Our chicken sales are now on par with beef sales,” he said.
In about 80 percent of markets, McDonald’s implemented its “best burger,” a so-called improvement to its classic cheeseburger. The recipe isn’t changed, rather the way the burgers are cooked. Big Macs get more special sauce, cheese is melted better and burgers are kept hotter, so they’re still warm by the time you get home.
By the end of 2026, the brand expects to have the new recipe in “nearly all” markets.
There’s also “the big arch,” a new burger McDonald’s is testing in three international markets. The double cheeseburger includes meltier cheese, crunchy toppings and tangy McDonald’s sauce. “It’s a quintessential McDonald’s burger with a twist on our familiar flavors,” Kempczinski said.
McDonald’s is pushing its loyalty app to increase sales. The app reached 166 million members, which is ahead of expectations, he said. Loyalty customers comprise 25 percent of global sales. App users visit more frequently and spend more money than non-loyalty members, on average, Kempczinski said.
“As a result, we’re driving digital market share gains,” Kemczinski said, “and we’re continuing to build on our understanding of customer preference, personalization and behaviors.”