Restaurants: McDonald’s is Finally Regaining Momentum, Franchisees Say

Why is the topic trending? 

• Turnaround Story: The article discusses a potential positive shift in McDonald's performance and franchisee sentiment after a period of volatility and some challenges, making it a relevant and positive development for the fast-food industry and investors.

• Key Menu Innovations: The upcoming launch of McCrispy Strips as a permanent menu item (the first since 2021) and the return of Snack Wraps are significant menu changes that generate interest among consumers, franchisees, and industry analysts.

• Value Strategy: McDonald's renewed focus on value offerings, including the McValue Menu and the $5 Meal Deal, is a crucial strategy in the current economic climate, making its impact and effectiveness a key point of discussion.

• Competitive Landscape: The article touches upon McDonald's competition with other QSR chains like Wendy's and Taco Bell, as well as its efforts to compete with chicken specialists like Chick-fil-A and Raising Cane's, highlighting McDonald's strategic moves within the industry.

• Franchisee Perspective: The insights shared by McDonald's franchisees provide a unique and valuable perspective on the company's performance and strategies, making the article insightful for stakeholders.

Overview:

The article reports a positive shift in sentiment among McDonald's franchisees, according to BTIG analyst Peter Saleh. This optimism stems from recent April gains, easier year-over-year sales comparisons, and an anticipated boost from upcoming menu launches like McCrispy Strips and the return of Snack Wraps, along with successful promotions like the Minecraft event. The article explores the factors contributing to this renewed momentum, including the company's focus on value offerings and its strategic moves in the chicken category.

Detailed Findings:

• Positive Franchisee Sentiment: McDonald's franchisees are reportedly more optimistic due to recent sales improvements in April.

• Impact of Promotions: The Minecraft promotion significantly boosted sales in April, indicating the power of limited-time offers and collectible items.

• Anticipated Success of New Menu Items: Franchisees are particularly enthusiastic about the permanent launch of McCrispy Strips (a revamped version of Chicken Selects) and the return of Snack Wraps, viewing them as key drivers for sales and value perception.

• Focus on Value: McDonald's McValue Menu, including the $5 Meal Deal and Buy One, Get One (BOGO) offers, has significantly impacted sales mix, with value items accounting for a substantial portion of transactions. While the BOGO offer's effectiveness is questioned, the $5 Meal Deal is generally viewed positively.

• Strategic Push in Chicken: McDonald's recognizes the dominance of chicken in the QSR industry and is making strategic efforts to strengthen its position in this category with the McCrispy line and a dedicated chicken category team.

• Breakfast Focus: There's a renewed focus on the breakfast daypart with a national campaign, aiming to regain lost sales in this historically profitable area.

• Krispy Kreme Partnership: The rollout of Krispy Kreme doughnuts to McDonald's locations has generated mixed opinions among franchisees, with some reporting satisfaction and others citing supply challenges and inconsistent sales.

• Lobby Remodel Pause: McDonald's has temporarily paused its lobby remodel requirements, providing some relief to franchisees.

• Positive Net Restaurant Growth: McDonald's experienced significant net growth in the number of restaurants in the US in 2024, the highest since 2013, primarily driven by franchise expansion.

Key Takeaway:

McDonald's appears to be regaining momentum, driven by successful promotions, anticipated positive impacts from new and returning menu items, and a renewed focus on value offerings, although the effectiveness of certain value tactics and the Krispy Kreme partnership remain areas of discussion.

Main Trend:

• McDonald's Strategic Revival Through Menu Innovation and Value Proposition: McDonald's is attempting to reignite growth and improve franchisee sentiment by strategically launching popular menu items, both new and returning, and by emphasizing value through various deals and platforms.

Description of the Trend (please name it):

• The Golden Comeback: This trend signifies McDonald's efforts to overcome recent challenges and regain market momentum through a combination of appealing menu innovations, a strong value proposition, and strategic focus on key growth areas like chicken and breakfast.

What is consumer motivation:

• Desire for Familiar Favorites: Consumers are likely motivated by the return of popular items like Snack Wraps, which have a nostalgic appeal and a proven demand.

• Value Seeking: In the current economic climate, consumers are motivated by affordable meal options and deals like the $5 Meal Deal.

• Interest in New Products: The introduction of the McCrispy Strips as a permanent menu item offers a novel option for consumers interested in trying new chicken products.

• Engagement with Promotions: Limited-time promotions like the Minecraft meal with collectibles can drive impulse visits and appeal to families and fans of the franchise.

What is driving trend:

• Franchisee Feedback and Demand: The return of Snack Wraps, a highly requested item by both consumers and franchisees, indicates a response to market demand.

• Strategic Menu Evolution: The permanent addition of McCrispy Strips reflects McDonald's broader strategy to strengthen its chicken offerings in response to the category's growth and competitive landscape.

• Addressing Traffic Decline: The focus on value offerings is a direct response to recent traffic declines, particularly among lower-income consumers.

• Leveraging Brand Recognition: McDonald's is leveraging its brand recognition and established menu items while introducing new options to attract and retain customers.

What is motivation beyond the trend:

• McDonald's also aims to capitalize on its breakfast dominance and regain lost sales in this profitable daypart through marketing efforts.

• The partnership with Krispy Kreme, while having mixed initial results, aims to attract customers seeking sweet treats and potentially increase overall store traffic.

Description of consumers article is referring to:

• Age: The article refers to a broad consumer base, but the success of the Minecraft promotion suggests a focus on families and potentially younger demographics interested in the associated collectibles. The return of Snack Wraps may appeal to millennials and older Gen Z who remember their initial popularity.

• Gender: The article does not specify gender differences in consumer response.

• Income: McDonald's is actively trying to regain traffic from lower-income consumers through its value menu offerings, indicating this segment is a key focus.

• Lifestyle: The focus on breakfast caters to consumers with morning routines, including commuters (although this segment might be evolving with remote work). The appeal of value menus targets budget-conscious consumers across various lifestyles. The Minecraft promotion targets families and individuals interested in pop culture and collectibles.

Conclusions:

The article concludes that McDonald's is experiencing a positive shift in momentum, largely attributed to upcoming menu innovations in the chicken category and a renewed focus on value offerings. While some aspects of their strategy, like the BOGO deal and the Krispy Kreme partnership, face scrutiny, the overall sentiment among franchisees is optimistic. The company's efforts to address past challenges and strategically position itself in the competitive QSR landscape appear to be gaining traction.

Implications for Brands:

• Importance of Menu Innovation: Regularly updating and introducing appealing menu items, especially in high-demand categories like chicken, can significantly impact consumer perception and sales.

• Value Proposition is Key: In the current economic environment, offering strong value options is crucial for attracting and retaining customers, particularly from lower-income segments.

• Leveraging Nostalgia: Bringing back popular discontinued items can tap into existing customer demand and create excitement.

• Power of Promotions and Partnerships: Strategic promotions and collaborations can drive short-term sales boosts and attract new customer segments.

• Franchisee Alignment: Maintaining positive relationships and addressing concerns of franchisees is vital for the overall success and implementation of brand strategies.

Implication for Society:

• The success of value menus at major fast-food chains can provide affordable meal options for a wide range of consumers, especially during times of economic pressure.

• Menu innovations and promotions can influence dietary habits and preferences, particularly among younger demographics.

• The expansion of major chains like McDonald's reflects broader trends in consumerism and fast-food culture.

Implications for Consumers:

• Consumers will have access to new permanent menu items like McCrispy Strips and the return of popular options like Snack Wraps at McDonald's.

• The continued focus on value menus provides more affordable meal options, potentially easing budget constraints.

• Promotions and partnerships can offer added value and unique experiences, such as the Minecraft collectibles.

Implication for Future:

• McDonald's potential resurgence could intensify competition within the fast-food industry, prompting other chains to innovate and enhance their value offerings.

• The success of McDonald's chicken strategy could further solidify chicken's dominance as a key protein in the QSR sector.

• The long-term impact of the Krispy Kreme partnership on McDonald's traffic and profitability will be closely watched.

• The effectiveness of different value strategies (like the $5 Meal Deal vs. BOGO) will likely shape future approaches to attracting budget-conscious consumers.

Consumer Trend (name, detailed description):

• Value-Driven Indulgence with Nostalgic Appeal: This trend describes consumers' desire for affordable and convenient food options (value-driven) that still provide a sense of enjoyment or satisfaction (indulgence), often coupled with the appeal of familiar or previously loved menu items (nostalgic appeal).

Consumer Sub Trend (name, detailed description):

• Promotion-Triggered Impulses: This sub-trend highlights how limited-time offers, especially those tied to popular entertainment or offering collectible items, can effectively drive immediate consumer visits and purchases, even for full-priced items.

Big Social Trend (name, detailed description):

• Economic Consciousness in Consumption: This broader trend reflects the increasing awareness and prioritization of affordability and value in consumer purchasing decisions across various sectors due to economic pressures and cost-of-living concerns.

Worldwide Social Trend (name, detailed description):

• The Global Appeal of Familiar Fast Food with Local Twists: While the article focuses on the US, the enduring global popularity of McDonald's and the strategy of introducing both globally recognized and locally relevant menu items demonstrate a worldwide trend of consumers seeking both familiarity and novelty in fast food.

Social Drive (name, detailed description):

• The Pursuit of Affordable Comfort: This social drive underscores consumers' tendency to seek out familiar and comforting food options, especially during times of uncertainty or stress, and their preference for these options to be accessible and affordable.

Learnings for brands to use in 2025: (bullets, detailed description)

• Balance Value and Innovation: Offer competitive value options to attract budget-conscious consumers while continuing to innovate with new and appealing menu items to drive excitement.

• Listen to Consumer and Franchisee Feedback: Pay close attention to what customers and franchisees are requesting and adapt strategies and menu offerings accordingly, as seen with the return of Snack Wraps.

• Strategic Partnerships Can Drive Traffic: Collaborations with well-known brands or entertainment franchises can create buzz and attract new customers, as demonstrated by the Minecraft promotion.

• Chicken Remains a Key Growth Area: Recognize the ongoing dominance of chicken in the fast-food sector and strategically invest in and promote chicken-based menu items.

• Breakfast is a Critical Daypart: Continue to invest in and market the breakfast menu, as it remains a significant revenue and profit driver for QSR businesses.

Strategy Recommendations for brands to follow in 2025: (bullets, detail description)

• Implement a Multi-Tiered Value Strategy: Offer a range of value options, from everyday low prices to bundled meals and promotional deals, to cater to different consumer needs and budgets.

• Develop a Robust Chicken Platform: Continuously innovate and market high-quality chicken products in various formats (sandwiches, strips, wraps) to effectively compete in this dominant category.

• Leverage Digital Channels for Promotions and Loyalty: Utilize mobile apps and digital platforms to offer exclusive deals, personalized offers, and build customer loyalty, as highlighted by the app discounts within the McValue Menu.

• Explore Strategic Collaborations: Identify potential partnerships with popular entertainment franchises, food brands, or influencers to create limited-time offers that generate excitement and attract new customer segments.

• Maintain Open Communication with Franchisees: Regularly engage with franchisees to gather feedback, address concerns, and ensure alignment on key strategic initiatives, fostering a collaborative approach to driving brand success.

Final sentence (key concept) describing main trend from article (which is a summary of all trends specified):

McDonald's strategy for regaining momentum in 2025 hinges on a dynamic approach that blends enticing menu innovations with compelling value propositions, aiming to resonate with a broad consumer base navigating economic considerations and seeking familiar yet exciting fast-food experiences.

What brands & companies should do in 2025 to benefit from trend and how to do it:

Brands and companies in the QSR and broader food industry should recognize the continued importance of value and the power of strategic menu innovation. To benefit, they should: conduct thorough market research to understand current consumer price sensitivities and preferences for familiar and new items; develop a diverse menu that offers both value-oriented options and exciting, high-quality innovations, particularly in popular categories like chicken; consider strategic partnerships and promotions to drive short-term traffic and brand awareness; and actively solicit and incorporate feedback from both customers and franchisees or partners to ensure strategies are well-aligned with market needs and operational realities. This can be achieved through continuous monitoring of sales data, social media sentiment, and franchisee input, followed by agile adjustments to menu offerings, pricing strategies, and marketing campaigns.

Final Note:

• Core Trend:

  • The Golden Comeback: McDonald's is strategically revitalizing its business through a combination of popular menu innovations and a strong emphasis on value to regain momentum in the competitive fast-food landscape.

• Core Strategy:

  • Value-Driven Menu Innovation and Strategic Partnerships: Brands should prioritize offering affordable options while simultaneously introducing appealing new or returning menu items and exploring collaborations to enhance customer interest and drive traffic.

• Core Industry Trend:

  • Intensified Competition Focused on Value and Chicken: The QSR industry will likely see increased competition centered around providing strong value to budget-conscious consumers and excelling in the popular chicken category.

• Core Consumer Motivation:

  • Seeking Affordable Familiarity and Excitement: Consumers are motivated by the desire for cost-effective and convenient food options that offer both the comfort of familiar favorites and the novelty of new and appealing menu items.

Final Conclusion:

McDonald's efforts to regain momentum in 2025 provide valuable insights for all brands in the food industry. By strategically balancing value, menu innovation, and customer engagement, companies can navigate the current economic climate and effectively cater to consumer preferences for both affordability and appealing experiences.

Core Trend Detailed:

• Description: This core trend encapsulates McDonald's strategic efforts to revitalize its brand and business momentum in 2025. It involves a deliberate combination of introducing new and popular returning menu items to generate excitement and appeal, while simultaneously emphasizing value offerings to attract and retain a broad consumer base, particularly those sensitive to economic pressures. This comeback is also characterized by McDonald's strategic focus on high-growth categories like chicken and breakfast, along with the exploration of partnerships and the implementation of operational adjustments to improve efficiency and franchisee satisfaction.

• Key Characteristics of the Trend (summary):

  • Strategic Menu Innovation: Launching permanent items like McCrispy Strips and bringing back fan favorites like Snack Wraps.

  • Emphasis on Value: Highlighting affordable options like the McValue Menu and the $5 Meal Deal.

  • Focus on Key Categories: Prioritizing growth in the chicken and breakfast dayparts.

  • Leveraging Promotions and Partnerships: Utilizing limited-time offers like the Minecraft meal and exploring collaborations (e.g., Krispy Kreme).

  • Addressing Operational Efficiency: Making adjustments like pausing lobby remodels to support franchisees.

• Market and Cultural Signals Supporting the Trend (summary):

  • Franchisee Optimism: Improved sentiment among McDonald's franchisees signals positive internal momentum.

  • Successful Promotions: The significant sales boost from the Minecraft promotion demonstrates the effectiveness of strategic limited-time offers.

  • Consumer Demand for Returning Items: The anticipation and demand for the return of Snack Wraps indicate a strong market for nostalgic favorites.

  • Growth in Chicken Category: The overall market trend showing the strength and growth of the chicken segment supports McDonald's strategic focus.

  • Consumer Focus on Value: Economic conditions and consumer behavior indicate a strong demand for affordable meal options.

• How the Trend Is Changing Consumer Behavior (summary):

  • Increased Visits: Successful promotions and appealing menu items are driving increased foot traffic to McDonald's locations.

  • Greater Value Perception: The focus on affordable deals is enhancing consumers' perception of McDonald's as a value-for-money option.

  • Trial of New Items: The launch of new menu items encourages consumers to try different offerings, potentially leading to new favorites.

  • Re-engagement with Familiar Favorites: The return of popular items can re-engage customers who may have drifted away.

  • Potential for Increased Spending: While value is a draw, successful full-priced promotions and add-on opportunities can also drive up the average customer check.

• Implications Across the Ecosystem (summary):

  • For Brands and CPGs: Highlights the importance of menu evolution, value strategies, and responsiveness to consumer demand. It also showcases the potential of strategic partnerships for driving customer engagement.

  • For Retailers: Demonstrates the impact of product mix and promotional activities on customer traffic and sales in the fast-food sector. It also underscores the need for operational efficiency and franchisee support.

  • For Consumers: Provides more dining options, including both new and nostalgic favorites, and offers a greater variety of price points, particularly with the focus on value menus.

• Strategic Forecast: McDonald's "Golden Comeback" trend is likely to continue through 2025 as the company continues to roll out new menu items and maintain its focus on value. The success of these initiatives will depend on consistent execution, effective marketing, and the ability to address any challenges related to supply chain and franchisee satisfaction. The increased competition within the QSR sector, particularly in the chicken category, will also play a role in shaping McDonald's future success.

• Final Thought: McDonald's strategic revival in 2025 underscores the enduring power of a strong brand to adapt to changing market conditions and consumer preferences through a thoughtful combination of innovation, value, and a focus on core strengths.

Source: https://www.qsrmagazine.com/story/mcdonalds-is-finally-regaining-momentum-franchisees-say/