McDonald’s is planning to revamp its value strategy to revive US sales. Earlier this year, the company expanded its low-cost options, introducing at least 10 items priced under $3. However, Chief Executive Officer Chris Kempczinski revealed that franchisees did not always follow price recommendations from third-party advisers, which hurt results during the earnings call on Aug. 4.
Strategic Shifts and Competition
The Chicago-based company is also pausing spot restaurant visits through March 31 for some franchisees. These visits are being replaced with targeted training aimed at improving the diner experience, with staff focusing on hospitality and ensuring menu items are prepared correctly.
Staff will participate in sessions on hospitality and ensuring menu items are always prepared right.ALSO READ: McDonald's Stumbles But Rivals Gain Edge In Fast-Food Value War"There's more work to do in these areas," McDonald's said in the message. "A customer's last visit is often what determines whether they will return, which is why every interaction should reflect the best of McDonald's."The Big Mac seller is facing fierce competition from Burger King, which last quarter grew at a faster pace thanks to a revamp of its signature Whopper and ongoing restaurant remodels. That chain, which is owned by Restaurant Brands International Inc., has also appointed a manager in charge of addressing any issues diners have during their visits.
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McDonald's US sales declined in July and August, according to debit- and credit-card data tracked by Bloomberg Second Measure. The upcoming investor day, scheduled for Sept. 23, "could prove a key clearing event" for management to prove that it has a credible plan, Jefferies analyst Andy Barish said in a recent investor note.
ALSO READ: McDonald's, KFC Among 10 Bengaluru Food Outlets Fined Upto Rs 25,000 Over Waste Violations"For the stock to rebound, management will have to convince investors the recent same-store sales slowdown is fixable (soon)," Barish wrote.
