McDonald's won't make pricing change customers demand

McDonald's has talked a lot about winning back its reputation for value, but that's not the chain's only focus.

Jul 28, 2025 - 10:30

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McDonald's won't make pricing change customers demand

About a months ago, my son and I were at Bradley Airport exterior of Hartford, Conn. We wanted lunch at diverse locations, so I gave him a $20 bill, pondering that should be ample for anything he desires to eat at a McDonald's.

Sadly, $20 did no longer quilt his 10-portion Rooster McNuggets meal. That aggregate, which came with fries and a drink, changed into about a cents over $20, so he opted for the 6-portion combo.

Now, each person knows that airport drinking locations face elevated charges, but this markup seemed crude. The identical combo, ordered by technique of Uber Eats (which on the entire charges extra than an in-store expose), payment $10.49 in Port St. Lucie, Fla.

The airport stamp changed into nearly double the payment, which does no longer replicate neatly on McDonald's and originate you marvel if the chain should provide some kind or customary pricing nationwide.

That is something analyst John Ivankoe requested about all the plan by technique of McDonald's (MCD) first-quarter earnings call.

"It be rather apparent having a lope hunting the country, the amount of core menu pricing incompatibility that you've got gotten. And, obviously, I understand the entire diverse economic and competitive reasons for that. But the actuality is that there will not be any longer a bunch of stamp certainty specifically around the core menu. So, produce you suspect that, that is a chance? Is it a risk?" he requested.

Some McDonald's areas have important elevated prices.
Image source: Eugene Gologursky/Getty Footage

McDonald's CEO shares key pricing recordsdata

McDonald's drinking locations are operated by franchisees, and the chain does no longer living minimal or most pricing. That is something CEO Chris Kempczinski talked about all the plan by technique of the earnings call.

"Smartly, at the stay of the day, pricing is an inherently local decision, and it's told by the trading location that exists round each of our particular person drinking locations. And our dedication and the point of curiosity is, we must originate obvious that relative to the trading location that we're competing in that we're offering robust payment, and that's the explanation what reveals up on both the menu board and that also reveals up with the promotions and digital affords that we're working," he added.

Kempczinski aggressively pushed again at the the postulate of uniform pricing.

"So, I take into story it much less as round having predictability all the plan by technique of the country round a frequent menu, and it's extra about we must be competitive all the plan by technique of the trading areas that we're competing. I mediate when you glimpse at what's been going on with menu prices factual now, since the inflation has plot down and we're no longer nearly seeing as inflationary ambiance as we noticed no doubt last year and into — in 2023, they're no longer seeing the big strikes on core menu that you noticed previously," he added.

Kempczinski did acknowledge that inflation within the food space, at least for McDonald's, has slowed down. He believes franchisees keep in mind the truth that offering payment-based pricing is necessary.

"I mediate our franchisees also ogle how necessary it is for us to discontinuance disciplined on this, and we glimpse at pass-by technique of rates, as I described earlier, to originate obvious that we understand the customers' willingness to settle for any pricing. So, that is seemingly to be my statement on that," he shared.

McDonald's sees the payment of a payment menu

McDonald's world gross sales fell by 1%.

Kempczinski wasn't vastly stunned by that, but had admitted that some numbers were worse than he had planned for.

"We anticipated world QSR alternate traffic would be down within the first quarter, staunch alternate traffic fell extra than we anticipated in several of our great markets, including the U.S. In the U.S., total QSR alternate traffic from the low-earnings consumer cohort changed into down nearly double-digits versus the prior year quarter," he acknowledged.

The CEO also mighty that McDonald's noticed a weak point in yet one more buyer neighborhood.

"No longer like about a months ago, QSR traffic from center-earnings customers fell nearly as important, a favorable indication that the industrial power on traffic has broadened. On the other hand, traffic pronounce from the excessive-earnings cohort remains robust, illustrating the divided U.S. economic system, where low- and center-earnings customers in specific are being weighed down by the cumulative influence of inflation, and heightened awe relating to the industrial outlook," he added.

The resolution to that, he believes, is payment.

"All individuals knows that leadership in payment and affordability is paramount in an ambiance adore this, and we have been rising and refining our payment proposition to meet the desires of our customers, in particular our low- and center-earnings cohorts, as neatly as families internationally. Building upon the actions we began to soak up 2024, we now have got each day cheap stamp menus, or EDAP, and entry-level meal bundles in each of our big five international operated markets," he shared.