McDonald's tests affordable menu bundles to boost domestic sales

McDonald's reported a 0.2 percent decline in domestic same-store sales during the third quarter. In response, the company has begun an eight-week test of two affordable menu structures across approximately 1,900 restaurants in several U.S. regions. Comparable sales turned positive in September after declining slightly in July and August.

CEO Chris Kempczinski said the company is encouraged by improvements in domestic traffic during September and October. Recent promotions have included a $5 Sausage McMuffin with Egg meal and an $8 Big Mac meal. The company also partially restored digital offers, including a $2 breakfast sandwich and free fries with a minimum $1 purchase, to attract additional transactions from loyalty members.

Menu Test Success and Franchisee Momentum

Early results from the affordable menu test show promise. Unit sales of the leading Extra Value Meals have increased approximately 7 percent year-over-year. Franchisee momentum is also strong, with operators of another 4,000 restaurants independently introducing similar entry-level bundles ahead of the formal test results. Combined, these initiatives now cover more than 40 percent of the domestic U.S. system.

Digital transactions account for roughly one-third of McDonald's sales. The U.S. loyalty program, which has nearly 30 percent of the customer base, is a key driver. Customers typically increase their visit frequency approximately 2.5 times during the first 12 months after joining.

Specialty Beverage Strategy and Market Expansion

The company is simultaneously expanding its specialty beverage platform to boost sales. The August launch of the Red Bull Dragonberry Energizer sold more units than any other product in the lineup during its six-week run. Transactions containing specialty beverages carry average checks approximately 50 percent higher than the overall daily average.

More than half of these beverage occasions occur after lunch, providing incremental demand during typically slower periods. The platform already operates in nearly 18,000 restaurants across the U.S., Canada, Germany, and Australia. McDonald's aims to gain an additional 1.5 percentage points of beverage market share by 2030 and plans to introduce the beverages in more than 7,000 additional European restaurants by mid-2027.

Existing kitchen configurations lack sufficient space to support full beverage ambitions. Expanded beverage preparation areas will therefore be a significant component of upcoming restaurant remodels.

Global Performance and Strategic Initiatives

Globally, same-store sales increased 1.5 percent, with systemwide sales rising 4 percent to more than $38 billion in the quarter. International developmental licensed markets posted 4.2 percent growth, led by Japan which extended its streak to 44 consecutive quarters of positive comparable sales. International operated markets saw 1.4 percent growth, led by Australia and Germany.

Performance was mixed in other regions. France continued to underperform expectations, with disruptions associated with the war in Ukraine affecting restaurant operating hours. In China, results were tempered by a challenging consumer environment and softer results as third-party delivery companies reduced promotional subsidies.

McDonald's is advancing several long-term strategic initiatives under its multiyear 'NEXT' growth strategy. This includes restaurant modernization, enhanced hospitality training, and new technology. The 'Make It Golden' training initiative, the largest of its kind, is expected to reach more than 18,000 restaurants during the first quarter. The company also continues to expand testing of its Archy smart ordering system, expecting it to reach a majority of U.S. restaurants by the end of 2027.

Operational pilots for hand-breaded chicken are underway in the U.S. and Ireland, with advertised sales tests planned at approximately 100 U.S. restaurants in early 2027. Early results from about 10 Irish restaurants suggest wings could provide additional sales opportunities.

The company now expects approximately 2,500 gross restaurant openings worldwide in 2026, down from a previous target of 2,600, though its projection of roughly 2,100 net openings is unchanged. It is also progressing toward having 98 percent of its global restaurant portfolio franchised by 2028, having refranchised about 175 restaurants this year.

Looking ahead, McDonald's expects mid-single-digit food and paper inflation next year, complicating pricing decisions. Franchisees are working with the company to determine which menu items require particularly competitive prices and where modest increases might be appropriate. Chris Kempczinski emphasized the pragmatic approach, stating, "At McDonald’s, nothing is real until it’s real in the restaurants." The company plans to evaluate customer response, incremental traffic, sales, and franchisee economics before introducing a national affordable menu program in early 2027.