Speaking at the McDonald’s Impact Conference, 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 lower-priced meals, discounted bundles and limited-time promotions aimed at stretching diners’ dollars.
The strategy appears to be working as US sales rose 6.8% in the fourth quarter — the biggest jump in nearly two years — and lower-priced offerings and aggressive promotions drove traffic back to restaurants. Analysts had expected a smaller profit of 4.9%.
McDonald’s CEO, Chris Kempczinski, said there is growing evidence that the company’s value push is working, especially for low-income consumers who have been hit hard by inflation.
A McDonald’s restaurant in San Francisco on July 29, 2024. (David Paul Morris/Bloomberg via Getty Images)
Holiday promotions also play a role in attracting customers. Last December, McDonald’s introduced a Grinch-themed meal that the company said delivered “the highest single day sales in history.”
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The company renewed its Monopoly promotion in October after nearly a decade and introduced prices starting at $5 in November.
Industry analysts say consistency will be key as consumers become more selective about where they spend.
McDonald’s strategy is notable given how many US restaurants in the US struggle to maintain foot traffic. Across the industry, lower-priced chains have generally outperformed higher-priced competitors as shoppers trade up.
McDonald’s US sales rose 6.8% in the fourth quarter, the biggest jump in nearly two years. (Mario Tama/Getty Images)
Taco Bell increased same-store sales 7% in the latest quarter and KFC reported 3% growth, parent company Yum Brands said last week. Meanwhile, higher-priced Chipotle Mexican Grill reported a 1.7% drop in sales earlier this month.
Renewed customer momentum helped power stronger-than-expected financial results, underscoring how discount-driven traffic can translate into profits.
Exterior view of McDonald’s restaurant on May 24, 2024. (Photos by Paul Weaver/SOPA/LightRocket)
The decline in traffic translated into strong financial results. McDonald’s worldwide comparable sales rose 5.7% in the fourth quarter, beating expectations, while adjusted earnings beat Wall Street estimates as revenue rose to more than $7 billion. International markets also contributed to growth, with continued demand in Britain, Germany and Australia.
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Looking ahead, McDonald’s plans to build on accessible messaging while expanding into beverages such as iced coffees, structured sodas and energy-style drinks – offerings designed to drive more visits, especially among younger consumers. The new McCafe-branded beverage line will be rolled out in the US and select international markets this year after a 500-store test exceeded expectations.
Reuters contributed to this report.
