McDonald’s announced last month that it will focus on affordability in response to several complaints about rising costs. One way the fast-food giant plans to accomplish this is by emphasizing its value bundles.
During the UBS Global Consumer and Retail Conference on March 13, McDonald’s CFO Ian Borden mentioned the “challenging consumer environment,” citing the impact of inflation on consumer spending. According to a transcript of Borden’s remarks, lower-income consumers “expect greater value for money than they have in the past.”
Borden stated that as part of the chain’s focus on cheaper options, the fast-food behemoth will heavily push its meal bundles beginning in 2024. He added that 90% of McDonald’s outlets in the United States provide breakfast or lunch bundles for less than $4.
“We want to make sure the consumer knows what’s available and obviously is thinking of us when they’re making their choices,” said Borden.
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Furthermore, the CFO stated that lower-income clients are preferring to eat at home more frequently, which was also addressed at the chain’s most recent earnings conference in February. During the call, CEO Chris Kempczinski stated that the company “actually saw that cohort decrease in the most recent quarter,” referring to clients earning $45,000 or less.
McDonald’s prices increased by approximately 10% in 2023. Borden stated that the company anticipates price increases to decline when inflation slows.
McDonald’s also intends to attract customers by becoming “a lot more active” in bringing its digital channels to life and ensuring that its offers are appealing to consumers. The fast-food chain now has 34 million active loyalty members.
In addition to promoting bargain products, McDonald’s intends to launch larger burgers. Borden stated that the fast-food giant is currently testing a few larger burgers in select locations. If the menu items are successful, McDonald’s intends to launch them globally.
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