McDonald's executives admit diners think prices are too high, say they're working to create value

Core Insights - McDonald's executives acknowledged that consumers perceive the company's prices as too high, particularly among lower-income diners who are reducing their fast-food spending due to inflation [1][2] - The company reported worse-than-expected second-quarter earnings, with same-store sales declining across all divisions, indicating a need for improved value execution [1][2] Pricing Strategy - Executives are taking a "forensic approach" to evaluate pricing and create value, recognizing that their value leadership gap has shrunk compared to competitors [1][4] - A recent survey indicated that over 60% of respondents have cut back on fast-food spending due to high prices, impacting McDonald's customer base [2] Customer Behavior - Lower-income diners are not switching to other fast-food chains but are dining out less frequently overall, affecting McDonald's performance globally, especially in European markets [2][3] - The company has extended its $5 value meal offering, which has successfully attracted customers back to its restaurants, with 93% of franchisees supporting the extension [3][4] Sales Performance - The launch of the $5 meal on June 25 resulted in an 8% increase in visits compared to the average Tuesday in 2024, indicating a positive response from customers [3] - Although the $5 meal deal improved brand perceptions around value and increased guest count, it has not yet translated into higher sales figures [4]