Beef is a particular concern for McDonald’s, given its importance to the company’s menu. In fact, Kempczinski said beef prices have nearly doubled over five years across the company’s largest markets.
“We’re not expecting that the industry, all of a sudden, is going to have robust traffic growth,” Kempczinski said. “We think that’s going to be largely flat.”
While McDonald’s reported earnings and revenue that were broadly in line with analysts’ estimates for its most recent quarter, U.S. same-store sales — a key measure of how established restaurants are performing without the boost from new openings — rose just 0.8%. That was below expectations and down sharply from 2.5% a year earlier.
Globally, the pattern was similar, with comparable sales rising 1.3%, down from 3.8% in the previous quarter.
During the company’s earnings call, Kempczinski said the results were “below our expectations,” acknowledging that McDonald’s didn’t get the traction it wanted from its under-$3 value menu. With restaurant traffic stagnating, the company is looking to take market share instead, and prices are becoming a bigger part of that effort.
Bringing ‘value’ back
McDonald’s is confronting inflation differently this time because customers have already absorbed years of steep menu-price increases, leaving the company with less room to keep passing along higher costs.
The company is trying to win back price-conscious customers with $4 meals and menu items priced below $3 across breakfast, lunch and dinner, including the McDouble, McChicken and four-piece Chicken McNuggets. However, customers have become more selective about eating out, particularly at the lower end of the income scale.
Fast food isn’t healthy, but it’s supposed to be cheap. Increasingly, it’s neither.
A FinanceBuzz analysis found that McDonald’s menu prices doubled on average between 2014 and 2024, based on a basket of popular items. Some former value-menu staples rose even faster: the McDouble climbed 168%, while the Quarter Pounder with Cheese Meal jumped 122% and medium fries increased 138%. The analysis calculated overall consumer price inflation at 31% over the same period, using the Bureau of Labor Statistics’ CPI Inflation Calculator.
McDonald’s pushed back on the idea that its prices had dramatically outpaced inflation. In an open letter, McDonald’s USA President Joe Erlinger said the average price of its menu items rose about 40% between 2019 and 2024, roughly in line with increases in the company’s labor and food costs over that period.
