McDonald’s says focus on value is bringing back customers

McDonald’s Value Strategy Drives Strong Sales Growth in Fourth Quarter

McDonald’s strategic focus on value-driven offerings is yielding impressive results as the fast food giant reported a 5.7% increase in global same-store sales for the October-December period, significantly outpacing the 3.9% growth analysts had forecast.

The Chicago-based company’s fourth quarter revenue and earnings both exceeded Wall Street expectations, demonstrating the effectiveness of its renewed emphasis on affordability in a challenging economic climate.

Beginning in September, McDonald’s implemented price reductions on select U.S. combo meals, introducing Extra Value Meal promotions to complement earlier 2025 initiatives like the McValue menu. The reintroduction of Snack Wraps in July, priced at $2.99, further bolstered the chain’s value perception among consumers.

During an investor conference call, CEO Chris Kempczinski highlighted that these price-conscious strategies have helped McDonald’s regain market share among households with incomes below $45,000 – a demographic that had previously been moving away from the brand.

“McDonald’s is not going to get beat on value and affordability,” Kempczinski emphasized, underlining the company’s commitment to remaining competitive in the budget-friendly fast food segment.

Beyond pricing strategies, McDonald’s boosted U.S. traffic through targeted marketing campaigns, including the revival of its popular Monopoly promotion in October and a Grinch-themed meal offering in December. The latter proved extraordinarily successful, with Kempczinski noting that McDonald’s sold an astounding 50 million pairs of Grinch socks during the promotion’s first few days, temporarily making the restaurant chain the world’s largest sock retailer.

U.S. same-store sales rose by 6.8% during the quarter, though Chief Financial Officer Ian Borden cautioned that this growth rate will likely moderate in the first quarter of 2026, partly due to severe winter weather affecting restaurant operations and customer traffic across multiple regions.

The value-focused approach extends beyond U.S. borders. In Germany, for example, the introduction of lower-priced McSmart snacks has successfully driven increased store traffic. Overall, same-store sales in McDonald’s company-operated international markets increased by 5.2% in the fourth quarter, though Borden also anticipates a slowdown in these markets during the upcoming quarter due to weather impacts.

“We’re really confident about what’s within our control, really confident about the underlying momentum of the business,” Borden stated, expressing optimism despite potential short-term challenges.

Looking forward, McDonald’s plans to introduce new menu items throughout the year, including beverages inspired by its experimental CosMc’s restaurant format. The company intends to launch energy drinks, iced coffees, and fruity refreshers under its McCafe brand later in 2026, potentially opening new revenue streams and attracting different customer segments.

The financial results reflect McDonald’s successful execution of its strategy, with revenue increasing 10% to $7.01 billion in the fourth quarter, exceeding analyst projections of $6.84 billion. Net income rose 7% to $2.16 billion, while adjusted earnings per share reached $3.12, surpassing the forecasted $3.05.

Despite these strong results, McDonald’s shares remained flat in after-hours trading, suggesting investors may have already factored in positive expectations.

The emphasis on value appears to be an industry-wide trend among quick-service restaurants. Competitor Taco Bell, which expanded its value menu offerings in January 2025, recently reported a 7% increase in same-store sales for the same October-December period.

As inflation continues to impact consumer spending habits, McDonald’s value-centered approach positions the company to maintain its competitive edge in the fast food market while addressing the needs of increasingly price-sensitive customers across various income brackets.