McDonald's, the U.S. fast-food giant, warned on the 23rd that industry-wide customer traffic in its key markets is likely to remain flat as long as inflation stays elevated, and announced an $8.5 billion support package for franchisees over 10 years along with a series of long-term growth strategies. The stock fell as much as 6.5% following the announcement. In its second-quarter results released last month, growth in U.S. same-store sales fell short of market expectations, which the company attributed to execution missteps that hindered efforts to win back lower-income consumers. Skye Anderson, who has newly taken over as head of the U.S. business, acknowledged these challenges on the 23rd, saying the company has not been able to execute consistently and needs to improve store operations. Under the NEXT growth strategy announced in June, the company is focusing on improving food quality, service, value and innovation, and has also set new targets for store productivity and a goal of raising its operating margin to the low-to-mid 50% range by 2030. Management laid out a detailed roadmap for the first time on the 23rd. Susie Davidkanian, an analyst at research firm eMarketer, noted that consumers weigh factors beyond price in their choices, and that McDonald's needs to offer reasons to visit beyond discounts.
McDonald’s CorporationAnnounces an $8.5 billion 10-year franchisee support package and a 2030 operating-margin target, a financial commitment whose net effect is unclear.
McDonald's Holdings Company (Japan), Ltd.