Dive Brief:
- McDonald’s will add chicken strips as part of a dual focus on growing its chicken market share and using new menu items to revive the chain’s traffic, executives said on the company’s Q4 2024 earnings call Monday.
- McDonald’s traffic recovery, aided by the $5 Meal Deal, was derailed late last year by an E. coli outbreak caused by contaminated slivered onions served on Quarter Pounders. The chain’s comparable sales in the U.S. were down 1.4% in Q4, according to an earnings release.
- McDonald’s CEO Chris Kempczinski said the chain’s sales recovery will come from a combination of value offerings and full-priced menu items. In addition to chicken strips, the brand is planning to launch snackwraps in the U.S. market.
Dive Insight:
McDonald’s has room to grow its share of the fast food chicken market, Kempczinski said.
“We're excited about the significant opportunity we see within our chicken portfolio, and see the potential to add another point of chicken market share by the end of 2026,” Kempczinski said.
In addition to chicken strips and snackwraps, it will use the Chicken Big Mac as a recurring LTO to strategically drive traffic, Kempczinski said, though he declined to share timing estimates for the return of the wraps or the debut of the chicken strips. In a recent report, BTIG analysts suggested that chicken strips could hit the menu in late-April with snack wraps in June or July.
Aside from menu innovation, McDonald’s will continue to emphasize its value platform, which was gradually succeeding at driving a traffic and sales recovery prior to the October outbreak. McDonald’s launched an ad campaign in January highlighting a variety of value plays, including its $5 Meal Deal and a Buy One, Add One for $1 promotion.
Kempczinski said that while value deals and value marketing are important for driving customers, the chain is planning to overlay the discounted offerings with “a strong pipeline of creative marketing ideas that will delight our fans and will provide full margin check growth.”
“Our core menu remains at the heart of our business,” Kempczinski said.
McDonald's U.S. same-store sales from Q4 2022 to Q4 2024
CFO Ian Borden said the use of full-margin products like the Chicken Big Mac, as opposed to promotional discounts, amplified the company’s sales momentum in the run-up to the E. coli outbreak. Borden offered the brand’s Grinch Meal — a Canadian promotion — as an example of a full margin promotion the chain could replicate in other markets. That meal generated nearly 30 million in social media impressions, its highest ever use-generated content in the country, he said.
While the brand will look to layer in full-price traffic drivers, the $5 Meal Deal is a strong check driver, Kempczinski said.
“Even though that's compelling value, it's driving other purchases. So the average check on the $5 Meal Deal for us in the US is north of $10,” Kempczinski said.
