US business growth fell to a one-year low, and stock prices evaporated 19% during the year! McDonald's (MCD.US) reinvents a “cost-effective” line of defense

The Zhitong Finance App learned that McDonald's (MCD.US) is adjusting its value-added strategy portfolio after experiencing the slowest growth in more than a year in its US business.

According to a message to the operator, the company will work with franchisees in the next few weeks to develop a “longer term” plan that can attract diners who focus on value for money. At the same time, McDonald's is “building a short-term transition plan” to launch temporary products and digital offers, focusing on categories that are currently performing well. On its app, customers can buy a breakfast sandwich for $2 or get free fries with a minimum spend of $1.

This move is also accompanied by adjustments in the company's training and support methods for franchisees. This is the first sign of transformation since the company's new head of US business, Skye Anderson, took office, and it happened before Investor Day next week. Although McDonald's has generally outperformed its fast food rivals in recent years, the company is trying to avoid a long-term downturn in the US — especially as Burger King grows faster.

The stock has accumulated a decline of 19% since this year, which has increased the pressure on management.

Last quarter, sales at McDonald's mature US stores increased 0.8% — the weakest performance since the beginning of 2025. Last month, Anderson was appointed to bring “focus and urgency” to the business.

McDonald's was boosted by a $5 package in 2024, when the burger chain was trying to reverse the perception that its food was becoming too expensive. The latest memorandum shows that the company is seeking to further refine its affordability strategy.

The company said, “An attractive price-performance ratio remains critical to bringing customers into our stores and consolidating the fundamentals of our business.” The news was signed by the head of the company headquarters and the heads of the franchisee groups involved in formulating these plans.

Earlier this year, McDonald's expanded its cost-effective product lineup to launch at least 10 products that cost less than $3. However, CEO Chris Kempchinski said in the company's earnings conference call on August 4 that many franchisees with independent pricing space did not adopt suggestions from third party consultants, which hurt performance. McDonald's also reduced app-only offers and ended the “Plus $1 Buy 1 Get 1 Free” promotion.

McDonald's has previously announced a multi-year plan with the goal of becoming consumers' go-to dining destination, expanding its appeal beyond those who just want a quick and cheap fast meal. This includes higher quality food, such as hand-battered fried chicken, and modifications to the restaurant to make it feel more spacious. The company also wanted to provide friendlier service and wanted all customers to be greeted when they entered the store.

According to the memorandum, as part of these efforts, McDonald's will suspend temporary store visits to some franchisees until March 31 and instead carry out targeted training aimed at improving the customer experience. Employees will participate in training courses on hospitality and ensuring that menu products are always in place.

McDonald's said in this message that “there is more work to be done in these areas.” “The customer's last visit often determines whether they will return, which is why every interaction should reflect the best side of McDonald's.”

This Big Mac seller is facing intense competition from Burger King. Thanks to improvements to the signature Castle and ongoing store renovations, Burger King grew even faster last quarter. The chain, which is part of an international restaurant brand company, has also appointed a manager to handle any issues customers encounter during their arrival.

According to debit and credit card data tracked by Second Measure, McDonald's US sales declined in July and August. Jefferies analyst Andy Barish said in a recent investor report that Investor Day scheduled to be held on September 23 “may be a key 'clear question' event”, allowing management to prove that it has a credible plan.

Barish wrote, “For stock prices to rebound, management must convince investors that the recent slowdown in same-store sales can be resolved (soon).”