Forget the $5 value meal, McDonald's earns an embarrassing title

Both fast-food giants find themselves in very different places when it comes to keeping customers satisfied.

Jun 26, 2024 - 07:30

0 13

Forget the $5 value meal, McDonald's earns an embarrassing title

McDonald's waited until June to offer a $5 meal deal.

Despite the economy being generally healthy, many consumers are wary about their finances, and the fast food giant has largely ignored the value market.

That's an area where rival Wendy's (WEN) has been very focused. That chain has steadily offered its 4 for $4 deal and its $5 Biggie Bag, giving customers affordable choices that they can feel good about.

Burger King has not been as steady as Wendy's when it comes to value offerings, but it has offered $6 and $7 meal deals.

Value has also been a big part of the menu at Yum Brands' Taco Bell, a chain that has balanced premium offerings and its Cravings Value Menu.

Moving value to a major focus for McDonald's (MCD) is something that Chief Financial Officer Ian Borden addressed during the chain's fourth-quarter-earnings call.

"Providing our customers with affordable options has always been core to our brand, and it's even more important as consumers feel pressure on their spending, particularly the lower-income consumer," he said.

"We continue to listen to our customers by evolving our value offerings, maintaining strong perceptions in value for money and affordability."

Those efforts, while needed, are coming too late for the chain when it comes to public perception.

Be the first to see the best deals on cruises, special sailings, and more. Sign up for the Come Cruise With Me newsletter.

McDonald's has a customer-satisfaction problem.
Image source: Justin Sullivan/Getty Images

Fast-food fans aren't loving McDonald's

McDonald's came in last among all rated fast-food restaurants on the annual American Customer Satisfaction Index. The chain improved its score over last year, to 71 from 69, but fell well below the industry average of 79.

As usual, Chick-fil-A took the top spot in the annual report.

"Chick-fil-A drops 2% to an ACSI score of 83 but still leads among individual fast food chains for the 10th consecutive year," the ACSI said. "This long-term success is reflected in revenue, as the chain’s nonmall locations had an average revenue of $9.4 million in 2023 (more than double that of McDonald’s while being open one day less per week)." (Chick-fil-A closes on Sundays.)

The report does not offer much color about why specific companies are rated as they are, and the overall numbers seem as if they should favor McDonald's, which has invested heavily in its app.

"Order accuracy (86), mobile quality (86), and mobile reliability (85) receive high scores as improving technology may be increasing accuracy in filling customer orders," the ACSI added. "In fact, mobile quality exceeds that of full-service chains. Fast-food restaurants also receive high benchmarks for staff courtesy and both food and beverage quality (all 84)."

The ACSI does not address value specifically, but value is likely top of mind for many people who are surveyed to create the report.

Sign up for the Come Cruise With Me newsletter to save money on your next (or your first) cruise.

McDonald's tries to win back customer support

Americans may not be satisfied with McDonald's, but that does not seem to be hurting sales.

US comparable sales were up 4% in the fourth quarter, and Chief Executive Chris Kempczinski pushed back on the idea that McDonald's does not offer a good customer experience.

"Focusing on the fundamentals of creating an exceptional customer experience has delivered operational improvements, improved service times, and increased customer satisfaction across almost all of our major markets," he said.

More Fast Food:

The CEO also points to his company's success.

"Our Accelerating the Arches strategy is working, fueling over 30% comparable sales growth since 2019 and our MCD growth pillars enable us to remain agile in response to changing customer needs," he added. "For example, we've expanded loyalty to 50 markets around the world and reached over $20 billion in annual loyalty systemwide sales in 2023."

Kempczinski also took note of the strong loyalty among its customers.

"Our user base continues to grow, with over 150 million users that have been active in the last 90 days, making us one of the largest loyalty programs in the world," he said.

Original Post