For McDonald's and rivals, cheap deals no longer do the trick
MCD•Value meals still matter, but discounting alone is not enough
U.S. fast-food chains including McDonald's MCD.N that spent the second quarter battling to pull in price-conscious diners discovered discounts alone were no longer enough to keep them coming back.
Value meals and promotions have been the industry's most reliable traffic driver for the past two years as consumers squeezed by inflation sought cheaper meals. But results showed the strongest performers paired bargains with menu innovation, quality improvements and a smoother customer experience.
The approach helped chains such as Yum Brands' YUM.N Taco Bell attract budget-conscious consumers without resorting to blanket discounting across their menus. Its $5, $7 and $9 meal boxes were a hit with customers, while the chain kept introducing new menu items that encouraged spending beyond the entry-level deal.
Value succeeds when it is "really clear and simple" and does not feel like a "bait-and-switch", said Rachel Royster, director of strategic planning and innovation at Connections, a foodservice consultancy.
