McDonald's Value Menu Design and Digital Deal Removal Contribute to US Traffic Decline
McDonald's acknowledged that two deliberate operational decisions contributed to its US traffic shortfall in the second quarter. The company's value menu, called Everyday Affordable Price (EDAP), was designed with pricing flexibility for franchisees, allowing them to raise prices instead of lowering them.
The EDAP menu included 10 items available all day for under $3 and a $4 breakfast meal deal. However, only 60-65% of US restaurants followed the recommended pricing structure, giving franchisees room to increase prices on certain items.
CEO Chris Kempczinski admitted that this flexibility led to price increases across the EDAP menu, with some locations raising prices on small fries from a fixed $2 to $3 or more. This inconsistent pricing strategy contributed to US comparable sales rising just 0.8%, with negative guest counts and higher average check sizes.
The company also removed its digital deal, Buy One, Add One for $1, which was used by frequent customers. Kempczinski called this decision a 'bad trade' as it eliminated a reliable traffic driver at the same time McDonald's was asking those customers to shift to a new platform with inconsistent execution.
The combination of EDAP pricing flexibility and digital deal removal accounted for approximately two-thirds of US traffic shortfall in the quarter. McDonald's has since begun correcting these issues by redesigning EDAP, restoring national digital flash offers, and shifting marketing investment back towards Extra Value Meals.