During his speech at the McDonald’s Impact Summit, President Donald Trump urged the company to put more tartar sauce on the Filet-O-Fish.
Budget-conscious Americans are returning to McDonald’s as the fast-food giant doubles down on its offerings of value meals, discounted bundles and limited-time promotions aimed at boosting diners’ dollars.
The strategy appears to be working: U.S. sales rose 6.8% in the fourth quarter — the biggest jump in about two years — and cheaper deals and aggressive promotions drove traffic back to restaurants. Analysts had expected a smaller gain of 4.9%.
McDonald’s CEO Chris Kempczinski said there is growing evidence that the company’s value push is working, especially among lower-income consumers most affected by inflation.
A McDonald’s restaurant in San Francisco on July 29, 2024. (David Paul Morris/Bloomberg via Getty Images)
Holiday promotions also played a role in attracting customers. Last December, McDonald’s launched a Grinch-themed meal that the company said delivered “the highest single day of sales in history.”
MCDONALD’S OFFERS FREE MCNUGGET CAVIAR KITS FOR VALENTINE’S DAY CELEBRATION
The company revived its Monopoly promotion in October after nearly a decade and launched value offers starting at $5 in November.
Industry analysts say consistency will be key as consumers remain selective about where they spend.
McDonald’s strategy is notable considering that many U.S. restaurants in the U.S. are struggling to maintain footfall. Across the sector, lower-priced chains have generally outperformed higher-priced competitors as consumers trade less.
McDonald’s U.S. sales rose 6.8% in the fourth quarter, the biggest increase in about two years. (Mario Tama/Getty Images)
Taco Bell posted a 7% increase in same-store sales in the latest quarter and KFC reported 3% growth, parent company Yum Brands said last week. Meanwhile, the higher-end Chipotle Mexican Grill reported a 1.7% decline in sales earlier this month.
The renewed customer momentum has contributed to stronger-than-expected financial results, underscoring how discount-driven traffic can translate into profits.
Exterior view of a McDonald’s restaurant on May 24, 2024. (Paul Weaver/SOPA Images/LightRocket)
The traffic recovery translated into stronger financial results. McDonald’s global comparable sales rose 5.7% in the fourth quarter, beating expectations, while adjusted profits exceeded Wall Street expectations as sales rose to more than $7 billion. International markets also contributed to the growth, with steady demand in Britain, Germany and Australia.
CLICK HERE TO GET FOX BUSINESS ON THE GO
Looking ahead, McDonald’s plans to build on its affordability message while expanding into beverages such as cold brew coffee, craft sodas and energy drinks – offerings designed to drive additional visits, especially among younger consumers. A new range of McCafe-branded drinks will be rolled out in the US and select international markets this year after a trial in 500 stores exceeded expectations.
Reuters contributed to this report.
