U.S. business growth drops to lowest in a year, stock price plunges 19% year-to-date! McDonald's (MCD.US) urgently changes leadership to rebuild "cost-effectiveness" defense line

According to Zhitong Finance APP, McDonald's (MCD.US) is adjusting its value strategy portfolio after experiencing the slowest growth in over a year in its U.S. business.

According to a message sent to operators, the company will work with franchisees in the coming weeks to develop a "more long-term" plan designed to attract price-conscious diners. Meanwhile, McDonald's is "building a short-term transition plan" that launches temporary products and digital offers, focusing on product categories currently performing well in sales. Through its app, customers can buy a breakfast sandwich for $2, or get free fries with a minimum $1 purchase.

This initiative is also accompanied by adjustments to the company’s franchisee training and support methods. This is the first sign of change since Skye Anderson, the company’s new U.S. business head, took office, and comes ahead of next week’s Investor Day. Although McDonald's has generally outperformed fast food rivals in recent years, it is now trying to avoid a prolonged downturn in the U.S.—especially as Burger King’s growth accelerates.

The stock has fallen 19% this year, increasing pressure on management.

Last quarter, McDonald's U.S. same-store sales grew by 0.8%—its weakest performance since early 2025. Last month, Anderson was appointed to bring "focus and urgency" to the business.

In 2024, McDonald's saw a boost from its $5 value meal as the burger chain tried to reverse public perceptions that its food had become too expensive. The latest memo indicates the company is seeking to further refine its affordability strategy.

The company stated, "Attractive value remains essential for bringing customers into our stores and solidifying the fundamentals of our business," a message jointly signed by headquarters executives and representatives of the franchisee groups involved in developing these plans.

Earlier this year, McDonald's expanded its value meal lineup to include at least ten products priced under $3. However, CEO Chris Kempczinski said on the August 4 earnings call that many franchisees with independent pricing power did not adopt third-party consultant recommendations, hurting results. McDonald's also reduced app-only offers and ended the "Buy One Get One for $1" promotion.

McDonald's had previously announced a multi-year plan aiming to become the first choice for consumers, extending its appeal beyond those simply seeking a quick, cheap meal. This includes higher-quality food, such as hand-breaded chicken, and restaurant renovations to create a more open feel. The company also aims to provide friendlier service and wants every customer to be greeted when entering the store.

According to the memo, as part of these efforts, McDonald's will pause unscheduled visits to some franchisees’ stores until March 31, shifting instead to targeted training focused on improving customer experience. Employees will attend courses on hospitality and on consistently maintaining menu item quality.

McDonald's said in the message, "There is still more work to be done in these areas. A customer's last experience often determines whether or not they will return, which is why every interaction should show the very best of McDonald's."

The Big Mac vendor is facing fierce competition from Burger King. Thanks to improvements to its signature Whopper and ongoing restaurant renovations, Burger King achieved faster growth last quarter. The chain, part of Restaurant Brands International, also appointed a manager dedicated to resolving any customer issues during their visit.

According to debit and credit card data tracked by Second Measure, McDonald's U.S. sales declined in July and August. Jefferies analyst Andy Barish noted in a recent investor report that the Investor Day scheduled for September 23 "could become a crucial 'clearing the air' event," giving management the opportunity to prove it has a credible plan.

Barish wrote, "To see a rebound in the stock price, the management team must convince investors that the recent slowdown in same-store sales is something that can (quickly) be resolved."