McDonald’s focus on value has boosted sales in 2017, and the brand hopes to continue that momentum into next year.
The company announced that it will be introducing a value menu in early 2018 focused on $1, $2, and $3 price points, along with promotional deals that will vary throughout the year.
“One of the things that we have said to our franchisees in the U.S. is we don't have to win on value, but we can't lose on value,” McDonald’s U.S. president Chris Kempczinski said during a conference call Tuesday. “And that means we have to be competitive with our investments against a value program.”
Kempczinski said while McDonald’s is investing heavily on the value side, the investments are being balanced by efficiencies, such as in marketing, that are apparent to franchisees on the restaurant level.
“The fact that our owners and operators were at almost 100 percent signing up for this is probably the best testament,” he said. “They felt comfortable with the value investments being offset by some of the other things in the [financials].”
McDonald’s credits its sales growth this year, including a 4.1 percent same-store U.S. sales increase during its latest quarter, to value promotions including McPick 2 and $1 beverages. But, it has balanced that value with higher priced items like its Signature Crafted premium sandwiches and its McCafé platform.
“We've been able to capitalize on this increased traffic into our restaurants with menu news that drove customers to trade up to premium higher-margin products,” Kempczinski said. “As we've seen with both Signature Crafted and McCafé, when we improve the taste and quality of our products to meet customers' rising expectations, they reward us with more business.”