McDonald's

Financing

The story of McDonald's strange year, in 2 parts

The Bottom Line: The quick-service giant’s dichotomous year was illustrated with back-to-back stories on the chain’s successful Grinch meal and its new value-focused franchising standards.

Operations

McDonald's is making value part of its franchise standards

The fast-food giant, which is trying to bring back lower-income consumers frustrated by menu price inflation, will take additional steps to monitor operators’ work with third-party pricing consultants.

The fast food giant’s latest effort at nostalgia-based marketing is apparently flying out of its restaurants, to the point that locations are already running out of the chain’s Grinch-themed socks.

In a campaign-style speech to the fast-food giant’s franchisees, the president praised the company’s price cuts on Extra Value Meals and vowed to lower inflation.

The Bottom Line: The fast-food giant argues that its lower-priced combo meals will generate more customers and more sales over time, and profitability will follow. But costs aren’t exactly decreasing.

The company’s same-store sales rose 2.4% in the U.S. last quarter as the fast-food giant works its way out of a domestic slump. Each of the chain’s major markets showed growth in the period.

McDonald's Extra Value Meals campaign with 5% lower prices hasn't reversed declining foot traffic, with visits down 3-5% post-launch as value wars intensify across fast-food chains struggling with low-income consumer pullback.

We tried a selection of the fast-food burger chain’s crafted drinks, which are in test at about 500 locations. Here’s what we thought.

The Bottom Line: McDonald’s decision to take on the tip credit, and then say nothing else, has generated heavy criticism and a lot of questions. Why would it take on this topic right now?

A Deeper Dive: A special episode of the restaurant finance podcast explores the tip credit, and why the fast-food giant opted to leave the National Restaurant Association over the issue.

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