McDonald's admits menu change was 'bad trade' as value menu disappoints
McDonald's new menu featuring items under $3 has underperformed expectations, though the company reported a profitable quarter.
Fast-food giant McDonald's acknowledged on Tuesday that its new "McValue" menu, launched in April with several items priced under $3, has not met expectations. CEO Chris Kempczinski stated during the company's earnings call that the promotion's execution was inconsistent, with only about 60% to 65% of restaurants adhering to the recommended pricing.
The company indicated that the new value menu, which replaced a prior "buy one, get one for $1" offer introduced in 2019, did not yield desired results. Kempczinski described the shift in promotions as a "bad trade" that significantly impacted the quarter's underperformance. He admitted that two-thirds of the miss was related to this misstep.
Despite the softer sales from the value menu, McDonald's reported a profitable quarter overall. Global sales increased by 5% to $37 billion, and U.S. comparable sales rose by 0.8%. This occurred amidst broader consumer challenges with high prices.
The company also announced leadership changes, naming long-time executive Skye Anderson as the new president of McDonald's USA, succeeding Joe Erlinger after seven years. Following the earnings release, McDonald's stock was up 1.75% as of midday Tuesday.