Once famous for its dollar menu, McDonald's is no longer the place to go when you want to get the most bang for your buck -- thanks to inflation pushing prices sky high.
During an earnings call with investors, executives acknowledged that diners think the restaurant's prices are too expensive.
"We recognize that in several large markets, including the U.S., we have an opportunity to improve our value execution. Consumers still recognize us as the value leader versus our key competitors but it's clear that our value leadership gap has recently shrunk. We are working to fix that with pace," said McDonald's CEO Chris Kempczinski, per CNBC.
According to the earnings report, global comparable sales decreased 1.0% in the second quarter, reflecting negative comparable sales across all segments. Sales in the U.S. decreased 0.7%.
Diners priced out of McDonald's aren't eating at other fast-food restaurants, Kempczinski said, but instead they're eating out less frequently all together. And that's a trend the company doesn't see ending any time soon.
"At the end of the day, we expect customers will continue to feel the pinch of the economy and a higher cost of living for at least the next several quarters in this very competitive landscape," McDonalds U.S. President Joe Erlinger said on the call, per CNBC. "So we believe it is critical for us to consider these factors in order to grow market share, and return to sustainable guest count-led growth for the brand."
To that end, the company is executing a strategy to navigate short-term challenges and meet customer needs by focusing on "value, core menu and digital."
Part of that includes extending the "$5 Meal Deal" -- which includes a McDouble cheeseburger or a McChicken sandwich, small French fries, four-piece Chicken McNuggets and a small soft drink. The special deal launched in late-June and was intended to last for only one month, but was so popular that McDonald's decided to extend the offer through August. CNBC pointed out that the deal hasn't yet led to sales increases but it has increased guest count growth.
Another part of the strategy involves leaning into the power of McDonald's core menu, with an emphasis on its chicken offerings from the beloved McNuggets and McChicken to emerging favorites like the McCrispy and McSpicy.
McDonald's also plans to leverage its app with engaged loyalty customers who spend more and visit more often, by offering special offers, free loyalty points and free food.
"For 70 years we've led on value because it's what the brand stands for and frankly... we have an underlying competitive advantage that we can buy at a lower price than anybody else in our industry," Kempczinski told investors, per CNBC. "The point is, we know how to do this. We wrote the playbook on value and we are working with our franchisees to make the necessary adjustments."