McDonald’s Appoints New US President to Turn Around Sluggish Sales 

Ba da ba ba ba, Wall Street’s not lovin’ it. 

McDonald’s on Tuesday reported 0.8% growth at its US restaurants in the second quarter, its slowest pace in over a year, and sales of $7.1 billion that slightly trailed the $7.13 billion analysts had been expecting. The fast food giant’s earnings per share of $3.38, however, topped the $3.32 average estimate from Wall Street. 

The mixed results came with the announcement that the company named Skye Anderson, who became the chief operating officer earlier this year, to take over as the president of the US arm of McDonald’s business. The appointment “will bring focus and urgency” to McDonald’s goal of accelerating performance in its largest market, CEO Chris Kempczinski said in a statement. McDonald’s stock gained a little more than 1% Tuesday, though it’s still down roughly 12% year to date. 

Not-so-Happy Meals

McDonald’s has long been identified by its foundational promise to customers: value. But by raising prices during and after the COVID-19 pandemic due to the higher costs of food, labor and operations, the chain began losing ground with many middle-income Americans. If a meal at Chili’s or Applebee’s costs just a few dollars more than a meal at the Golden Arches, a customer might as well opt to sit down and get table service. On the other end, with low-income consumers grappling with still-high inflation and surging gas prices, McDonald’s cheapest offerings didn’t do as well as expected: 

• Pulling back on digital offers and removing the “Buy One, Add One for $1” feature meant fewer visits from some of Ronald McDonald’s most loyal customers. 
• On a call with analysts following the earnings report, Kempczinski said that only about 60% to 65% of its system had implemented the “under $3” menu, which should include 10 items. Franchisees set their own prices. 

Supersized Asks: McDonald’s has thrown a lot at both franchisees and customers of late, Kempczinski admitted. This year, restaurants had to pivot between offering the KPop Demon Hunters meal, a McValue program, new beverages and a FIFA World Cup promotion. “It’s tough to drive awareness when you’re sort of jumping around and giving those two-, three-, at most four-week windows,” the CEO added. The company will work on balancing those new menu items better moving forward, he added.