Maybe bigger is better? At least McDonald’s thinks so.
The fast food chain plans to implement a new growth strategy that aims to bring back customers — and it’s vying to do so with larger burgers, more chicken and a refined coffee experience.
McDonald’s chief financial officer Ian Borden likened the pullback in customers eating at the restaurant chain to inflation levels for food at home returning to their “historical dynamic.”
“Which means … some of those consumers are just choosing to eat at home more often,” Borden said during the UBS Global Consumer Retail Conference on Wednesday in New York.
Prices for food at home increased 1% in February, according to the U.S. consumer price index. Meanwhile, prices for food away from home have spiked by 4.5%. Borden added that consumers are still navigating elevated interest rates and dwindling savings from pandemic era stimulus checks.
But macroeconomic factors aren’t the only reason McDonald’s has seen a slowdown in demand. Between 2022 and 2023, the restaurant chain raised its prices as it looked to stave off inflation costs. Though the company’s latest earnings report shows that U.S. sales increased, demand from low-income customers fell.
Now McDonald’s sees a trio of opportunities.
“The opportunity is for a large, more satiating type burger, “ Borden said. “That opportunity is significant.”
The beef isn’t only staying in the bun. Borden said McDonald’s has plans to launch a new pilot program in select markets that will include additional beef items. It also plans to expand its chicken foothold, which Borden said has seen success, in part due to its McCrispy and McChicken items.
As for delivering a cohesive coffee experience, McDonald’s isn’t lovin’ it. “We are not happy with our progress in coffee,” Borden said, adding that with more than 100 coffee machines across its business, the restaurant chain is falling short of giving customers “taste and quality.”
“How can you possibly deliver a consistent experience if you aren’t even putting the product together in a consistent way?” Borden said.
McDonald’s plans to get more focused, Borden said, with the goal to “bring that consistency to life at scale.” By using this strategy, the restaurant chain “can deliver a significant impact on taste and quality for customers and deliver a better experience.”