Chicago: McDonald’s is preparing to revamp its value strategy in the United States as the fast-food giant looks to revive sales and strengthen its position against competitors such as Burger King. The company has already introduced a range of lower-priced menu items, but uneven adoption by franchisees has limited the impact of the strategy.

The Chicago-based company is also pursuing a broader multi-year plan aimed at making its restaurants a more appealing dining destination rather than focusing only on customers looking for quick and inexpensive meals.

The latest changes come at a challenging time for McDonald’s in the US. According to debit and credit card data tracked by Bloomberg Second Measure, US sales declined in July and August. The company is now preparing for an investor day scheduled for September 23, where management is expected to provide more details about its strategy.

Value strategy faces implementation challenges

Earlier this year, McDonald’s expanded its value offerings in the US by introducing at least 10 menu items priced below $3.

However, Chief Executive Officer Chris Kempczinski said during the company’s August 4 earnings call that many franchisees did not follow pricing recommendations from third-party advisers. Franchisees have considerable flexibility in determining prices, creating differences in how value offers are implemented across restaurants.

McDonald’s has also reduced its reliance on some promotional offers. The company pulled back on app-only deals and ended its buy-one-get-one-for-$1 promotion.

The developments suggest that the company is looking to adjust how it uses discounts and value pricing rather than relying solely on cheaper menu options to drive traffic.

For McDonald’s, the challenge is to attract price-sensitive customers while also protecting the broader positioning of the brand.

Company looks beyond cheap meals

McDonald’s has already announced a multi-year plan to broaden its appeal beyond customers primarily seeking inexpensive food.

The strategy includes changes to both the menu and restaurant experience. The company plans to introduce higher-quality food options, including hand-breaded chicken, while making restaurants feel more open and welcoming.

Service is another part of the strategy. McDonald’s wants customers to be greeted when they enter its restaurants, with the company placing greater emphasis on hospitality and consistency.

The company has also paused spot restaurant visits through March 31 for some franchisees in favour of targeted training sessions. Employees will receive training focused on hospitality and ensuring menu items are prepared correctly.

McDonald’s said customers’ most recent experience can influence whether they return, highlighting the importance of improving interactions at its restaurants.

Burger King puts pressure on McDonald’s

McDonald’s is facing increased competition from Burger King, which recorded faster growth last quarter after revamping its signature Whopper and continuing with restaurant remodels.

Burger King, owned by Restaurant Brands International, has also appointed a manager to address problems customers encounter during their restaurant visits.

The competitive pressure comes as major fast-food chains attempt to appeal to consumers who remain cautious about spending.

For McDonald’s, the combination of value pricing, menu innovation and restaurant improvements forms part of its response to changing customer behaviour.

The company is therefore trying to balance two objectives: offering affordable choices while improving the overall dining experience.

US sales decline adds urgency

The latest sales data have increased pressure on McDonald’s management to demonstrate that its strategy can improve traffic and sales.

Bloomberg Second Measure’s debit and credit card data showed that McDonald’s US sales declined in July and August. The slowdown has raised questions about whether the company’s recent value initiatives are sufficient to reverse weaker same-store sales.

The upcoming investor day on September 23 is expected to provide an important update on the company’s plans.

Jefferies analyst Andy Barish said the event could be an important opportunity for management to demonstrate that it has a credible plan to address the recent slowdown in same-store sales.

The analyst also said management would need to convince investors that the recent weakness in same-store sales can be addressed soon.

Restaurant experience becomes a key focus

Alongside pricing, McDonald’s is placing greater emphasis on the experience customers receive inside its restaurants.

The company’s planned hospitality training is intended to improve service and ensure that food is consistently prepared. The move comes as restaurants compete not only on price but also on convenience, quality and customer experience.

McDonald’s plans to make its outlets feel more open and improve interactions between staff and customers.

These changes form part of the company’s broader effort to encourage customers to return more frequently rather than visiting only when promotional offers make meals cheaper.

What the strategy means for McDonald’s

McDonald’s latest approach suggests that its US strategy is moving beyond a straightforward discount-led model.

The company has experimented with cheaper menu items and promotional offers, but franchisee participation and changing consumer behaviour have made it difficult to apply the strategy uniformly.

At the same time, competition from Burger King and other fast-food chains is putting pressure on McDonald’s to improve both value and customer experience.

The company now plans to combine affordable food options with menu improvements, restaurant upgrades and hospitality training.

The September 23 investor day is expected to provide more clarity on how McDonald’s intends to execute the next phase of its US strategy.

For now, the company faces the task of reversing recent sales weakness while ensuring that its value initiatives do not come at the expense of the broader brand experience.