CHICAGO: McDonald’s Corp faces a key challenge as it fights to reinvigorate a sagging stock price: Winning back the cost-conscious diners who believe its menu has become too expensive.
Shares of the Big Mac maker are down nearly 31% from their February high and on track for their worst annual return since 2002.
The burger chain guided for “slightly negative” US sales for the current quarter during an investor day event earlier this week, while sales last quarter rose just 0.8%, their slowest pace in more than a year.
Those signals come alongside longstanding gripes from customers, who have complained about everything from menu prices to an in-store experience that has suffered from the loss of playgrounds and other popular features.
Recent attempts at value offerings have had mixed results, while an US$8.5bil multiyear plan to improve service and food quality announced this week raised concerns that it would erode profits, sparking a fresh selloff in the company’s shares.
“Their prices have gone up substantially, and it’s no longer viewed as the best value in food,” said Jacob Aiken-Phillips of Melius Research, who has the lone “sell” rating on the stock among analysts tracked by Bloomberg.
“I could go to Texas Roadhouse instead and have an actual sit-down experience with my family that’s not that much more expensive.”
A McDonald’s spokesperson last Friday reiterated the company’s plans to act with urgency to put the US business in a stronger position exiting 2026.
In 2024, McDonald’s hit back at social media posts criticising rising prices: One widely circulated post showed a Big Mac meal costing US$18, which McDonald’s said was from one location in the United States out of more than 13,700.
That year also saw a boost from US$5 meal deals, as the burger chain looked to counter perceptions that its food had gotten too expensive.
The Economist’s Big Mac Index, typically used as a way to compare purchasing power parity between countries, shows that the price of the sandwich in the United States has risen by around 23% between 2019 and the end of 2025.
McDonald’s began hiking its menu prices after the pandemic to offset surging costs for ingredients like beef, rising labour wages and higher fuel.
Meanwhile, customers were also being squeezed by inflation and rising interest rates, making them more selective about where they spend their dollars.
The dynamic intensified competition within the restaurant industry, with chains vying for customer traffic by dangling limited-time offers and enticing shoppers with aggressive discounts.
While rising prices have hurt restaurants across the board, McDonald’s rivals appear to be faring better, at least for the time being.
Restaurant Brands International Inc’s Burger King posted US comparable sales growth of 8.5% in the latest quarter, exceeding estimates thanks to a revamped Whopper and Star Wars promotion.
Yum! Brands Inc-owned Taco Bell reported a 7% increase in same-store sales as its US$5, US$7 and US$9 meal boxes drove customer visits.
The companies’ shares are up 5% and down 8.4% year-to-date, respectively – underperforming the S&P 500’s gain of 13%.
McDonald’s shares, by comparison, are down 23% year-to-date. — Bloomberg
