McDonald’s Corp. (NYSE:MCD) has finalized plans to launch a new value menu to better compete with its rivals. The company will launch a U.S. value menu in 2018 that will include items priced at $1, $2, and $3. The announcement was made during the company’s quarterly conference call.
Chris Kempczinski, president of McDonald’s U.S., said, “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,’ and that means we have to be competitive with our investments against a value program.”
The move will put the U.S. fast-food industry under more pressure next year. Many chains have been relying on $4 and $5 bundles, including Wendy’s, KFC, Taco Bell, Carl’s Jr. and Hardee’s. Kempczinski said, “What you’re going to see from us next year is us being really fully competitive with our near-in competitors with a value program.”
Marketing strategies weren’t discussed on the conference call. However, it’s clear that McDonald’s is planning a national advertising campaign to promote its new value menu. The chain named Morgan Flatley as its new U.S. chief marketing officer in the spring.
During the recent third quarter, the company brought back its $1 any-size soft drinks and a 2 for $5 McPick deals. In September, the chain began promoting its updated McCafe coffee line. The company is also launching burgers made with fresh beef under a plan announced months ago.
Delivery is now available from roughly 8,500 restaurants worldwide. By the end of 2017, delivery should be available at about 10,000 restaurants in all, including about 5,000 in the U.S. Delivery is particularly strong in dense urban metropolitan areas, including New York, Boston, Miami and Los Angeles.
Almost all of the company’s U.S. operators have signed letters committing to a multi-year strategy of updating all McDonald’s restaurants. The updates include a six-week training curriculum for everyone at each restaurant and some big equipment upgrades. Mobile order and pay systems are to be available across the U.S. by the end of the year.
McDonald’s U.S. same-store sales rose 4.1 percent in the third quarter, beating analysts’ average forecast of 3.4 percent, according to Consensus Metrix. It was the division’s third straight quarter of same-store sales growth and its second consecutive quarter of positive comparable guest count growth.
Global same-store sales growth of 6 percent also beat expectations. McDonald’s has now recorded global same-store sales growth for nine straight quarters and comparable guest count growth for three straight quarters.