McDonald's has announced plans to introduce more lower-priced menu items next year in an effort to attract customers who are increasingly sensitive to rising living costs. The move is designed to address concerns among inflation-weary diners and stimulate sales at the fast-food giant.
During a call with Wall Street analysts on Wednesday, CEO Christopher Kempczinski revealed that the company recently launched an eight-week pilot program. This initiative is testing new affordable menu options at 1,900 locations across the United States. In addition to individual price adjustments, the chain is experimenting with mix and match bundles to determine which combinations effectively drive customer purchases.
The company intends to roll out these new offerings nationally in 2027, according to Kempczinski. The strategy comes after the release of McDonald's earnings report on the same day, which indicated modest growth in comparable sales at U.S. locations. Growth was recorded at 0.2% for the period from July to September, a significant decrease from the 2.4% growth seen during the same period last year.
Data from analytics platform Placer.ai highlights a broader trend in customer behavior, showing that overall foot traffic at U.S. McDonald's stores declined by 4.6% compared to the previous year. These figures underscore the challenge the chain faces in maintaining its customer base in a competitive market.
Kempczinski acknowledged that the company has not fully met the expectations of low-income diners who seek great entry-level value. He stated that the recent pilot testing is part of an ongoing effort to resolve these issues. He noted that the company discussed extensively how it did not perform as needed in the second quarter and is now working to address those shortcomings through active testing.
The announcement arrived the day after the U.S. midterm elections, where affordability concerns were a central theme. Many candidates campaigned on their ability to address cost-of-living issues and bring down prices. Gasoline prices have risen 38% since the start of the war in Iran, according to data from AAA, adding to the financial pressure on households.
Despite a general trend of resilient U.S. consumer spending, lower-income consumers are reporting tighter budgets. Inflation remains above the Federal Reserve's 2% target, and a larger share of income for these households is being allocated to essential expenses such as fuel and food.
Ryan Sweet, chief global economist at Oxford Economics, commented on the disparity in economic impact. Speaking at an event in New York City on Wednesday, he observed that low-income consumers are disproportionately feeling the effects of higher food and gasoline prices. This demographic continues to bear a significant burden of current economic conditions.
McDonald's strategy reflects a wider industry adjustment to these economic realities. By focusing on value propositions and testing bundle options, the company aims to re-engage customers who may have reduced their visit frequency due to budget constraints. The results of the eight-week pilot will likely inform the broader national rollout planned for 2027.
