McDonald’s rethinks menu after sales fall for first time in four years

McDonald’s is set to change its pricing strategy amid falling sales as bosses hint at a major menu shake-up in the near future.

The fast-food giant reported a 1 percent drop in sales from April to June at franchises that have been open at least a year, the first time the company’s sales have declined since the pandemic.

Chains have been offering discounted deals since the start of the year in a bid to win back customers who are aware of rising costs. However, bosses suggest more changes may be needed.

“Starting last year, we warned of a more discerning consumer, particularly among lower-income households — and as this year progressed, those pressures have deepened and expanded,” McDonald’s CEO Chris Kempczinski said on a conference call with investors.

“Consumers still see us as the value leader versus our key competitors, but it’s clear that our value leadership gap has narrowed recently,” Kempczinski said in a statement about the latest numbers. “We’re working to fix that at a rapid pace.”

But the CEO admits that sales are likely to remain low for the next few quarters. To combat this, the company is doing a “complete rethink” of its pricing, with a focus on discounted “value meals.”

The company points to successes like a $5 Happy Meal in the US and a deal in the UK where customers can get three items for £3. Both deals have been extended throughout the summer, with the UK deal returning on July 31 for four weeks – and these reports suggest they may be here to stay.

In January, Mr Kempczinski also complained about the “significant commercial impact” caused by the conflict between Israel and Gaza, with many customers deciding to boycott McDonald’s restaurants because of their apparent support for Israel.

Executives responded to the order in April by buying back all of its Israeli restaurants, but they continued to operate in the country. A McDonald’s spokesman said the boycott was “disheartening and unfounded.” Mr. Kempczinski added: “In every country where we operate, including Muslim countries, McDonald’s is proudly represented by local owners.”

“As long as this war continues… we don’t expect to see any significant improvement.”