Inflation concerns continue to impact consumer spending. McDonald’s reported lower-than-expected quarterly sales growth for Q1, citing conflict in the Middle East and more restrained consumer spending as reasons for the lack of sales growth, reported The Wall Street Journal.
In response, the QSR is increasing its promotions and deals across most of its U.S. locations to entice customers that are focused on getting more bang for their buck.
McDonald’s said that “price increases and marketing of its core menu items helped boost U.S. sales in its latest quarter as consumers increasingly hunted for deals,” wrote the Journal.
McDonald’s announced earlier this year that it would partner with Krispy Kreme to sell doughnuts in all restaurants by the end of 2026, “which analysts said could boost the chain’s breakfast business,” said the Journal.
McDonald’s has additionally found other ways to stay competitive recently, with the launch of its small-format, beverage-led concept called CosMc’s and changes to its signature burgers including a new special sauce and a brioche bun.
Other QSRs have seen success by increasing promotions—the most recent earnings reports from Chipotle Mexican Grill and Domino’s Pizza showed that they have generated growing sales by promoting their value to consumers.
It's not just QSRs that are hoping a value-based approach will attract more customers—discount grocery chain Aldi has had sales and foot traffic increases in the past year. Foot traffic at Aldi stores in March was up about 26% compared with the prior year, and higher than the 6% increase at rival Kroger stores and the 15% uptick at Trader Joe’s, according to mobile-device location data from analytics company Placer.ai, reported the Journal.
With prices that are 6-16% cheaper than Walmart, according to an analysis from retailing research and consulting firm Customer Growth Partners, and store formats that are about half the size of a regular supermarket, Aldi is able to both save money on its own expenses and draw in customers looking for less expensive groceries.