McDonald’s has found a pretty good cadence from its $5 meal deal to the point where the chain has won back low-income consumers for the first time in over a year and stabilized overall traffic erosion trends .

His plan worked, thanks to strong marketing campaigns such as collector meals, as well as operational improvements.

Related: McDonald’s $5 meal deal and marketing provided momentum before the E. coli

Then an attack of E. coli struck. Worse yet, it reached McDonald’s signature (and very popular) Quarter Pounders.

Commend the channel for acting quickly in tandem with health agencies and communicating extensively to identify the source and rectify the situation. But now he’s back to square one. The company has taken a big step forward in recovering from its first drop in same-store sales since 2020 and now finds itself two steps behind.

Related: McDonald’s Quarter Pounders will return to restaurants affected by the E. coli, but without onions

That said, during the company’s third-quarter earnings conference call Tuesday morning, CEO Chris Kempczinski and CFO Ian Borden laid out another plan for a further recovery, involving several elements outlined below.

Value strategy

Much of the chain’s strategy will continue to be based on its value proposition. As Kempcinski noted, the company has “moved with urgency to improve its value offerings in most of our key markets,” such as a 3-for-3 deal in the U.K. and $1 coffee in Canada.

“We consider good value to include both entry-level items and meal packages at affordable prices. This means offering Everyday Affordable Menus, or EDAP, in our markets. At McDonald’s, we define EDAP as a platform offering an assortment of items all offered at attractive entry-level prices, typically including breakfast, beef and chicken sandwich options,” he said. -he declared.

The company will combine EDAP platforms with meal plans under a brand equity platform. According to Kempczinski, this will help build recognition and affinity with customers.

“So when they’re thinking about an affordable food option, we’re at the top of the list,” he said.

Borden said this more holistic value platform would launch in the first quarter of 2025.

Full margin promotions

Along with these value options, there will always be full-margin promotions aimed at increasing check sizes. For example, the Collector’s Meal, launched in August, featured core stocks at all times of the day in more than 30 markets and generated high, full-margin check traffic.

“The campaign attracted customers to our restaurants, particularly in the US, where the promotion ran alongside the $5 Meal Deal. The Collector’s Edition maximized the power and scale of our global brand, while ensuring local flexibility and cultural relevance to connect fans in unexpected ways,” said Kempczinski.

Chicken

Although it is far too early to assess the results of the (also full margin) Launch of the Chicken Big Mac on October 10Kempczinski emphasized that chicken’s potential is categorically “huge,” as the protein is now twice as large as beef and growing faster. During the third quarter, the majority of McDonald’s largest markets increased their chicken market share.

“We have significant room to grow our share and we are working to respond to the moment and take advantage of its growth,” Kempczinski said, adding that the channel’s plan to expand McCrispy shares into almost all markets of here the end of 2025. is on track.

Great Arch

Of course, never count out McDonald’s beef stocks and that list will grow with the planned launch of Big Arch, currently in pilot phase in three international markets (Portugal, Germany and Canada). Kempczinski said the pilot is going well enough to accelerate its rollout to more international markets in 2025 (it’s unclear if that includes the United States). The larger, “more filling” burger is expected to strengthen McDonald’s leadership position in the beef category, as executives noted recently, and addresses a “unmet consumer need.”

Loyalty/digital

McDonald’s has stated its goal of signing up 250 million active loyal users by the end of 2027, and executives have said the company is well within reach of that goal. This growth should be a significant spark for the company: in the third quarter, the program’s system-wide sales generated nearly $8 billion globally. The program was also found to increase frequency and spending.

“Digital certainly continues to grow in importance, but it still remains in the minority among our clients. In the medium to long term, digital will become a much bigger part and we will then obviously bring the value to life at the individual level with lots of data and information, which will allow us to effectively target the most relevant value for that. individual consumer,” Borden said.

Operations

As Borden pointed out, value is now a “holistic” idea that also includes customer experience, and in the third quarter, McDonald’s improved its drive-thru speed to double digits, while satisfaction scores reached a record level.

“While we will continue to strive to ensure prices are right for our customers, we will not forget all the intangibles that create great value, knowing that delivering an exceptional experience, especially now, is fundamental,” said Borden.

International

McDonald’s international markets remained under pressure in the third quarter, with global same-store sales down 1.5%. The International Operated Markets segment decreased by 2.1%, impacted by negative commercial sales in several markets, driven by France and the United Kingdom, while the International Licensed Development Markets segment decreased by 3, 5%, impacted by the ongoing war in the Middle East and negative commercial sales. in China.

Kempczinski said that despite challenges in many international markets, McDonald’s is either gaining market share or experiencing sequential improvement, “which is encouraging.”

“But I will also tell you, I am not satisfied with the pace. And I think we need to do more to scale up and accelerate. A number of adjustments are made to each individual market to increase their value programs. And I think we also have an opportunity to add to that with greater marketing efforts,” he said.

Leverage resources

Finally, Kempczinski noted that McDonald’s vast resources are an advantage in this recovery process and, indeed, there are certainly not many companies in or outside the industry that match McDonald’s size.

“We’re seeing success with the $5 Real Deal, we’re going to have food innovation, we’re going to drive digital. And we are prepared to do more if necessary, to ensure that we leverage all of McDonald’s resources to re-engage that customer,” he said.

Kempczinski did not rule out allocating more money to messages aimed at restoring consumer confidence in the coming months, but added that this would not replace existing and relevant value messages.

“I think we can do both. I think we can make sure we communicate the steps we’ve taken and be able to resolve this issue if there is continued discomfort. At the same time, I think we can also continue to generate value and we can be the originator of marketing news,” he said. “We’re going to do what we need to do to make sure we get momentum back into the business.”

Contact Alicia Kelso at (email protected)