For McDonald's and rivals, cheap deals no longer do the trick

Domino's Pizza

11/08/2026 11:46

    By Savyata Mishra and Waylon Cunningham
    Aug 11 (Reuters) - U.S. fast-food chains including
McDonald's  MCD.N  that spent the second quarter battling to
pull in price-conscious diners discovered discounts alone were
no longer enough to keep them coming back. 
    Value meals and promotions have been the industry's most
reliable traffic driver for the past two years as consumers
squeezed by inflation sought cheaper meals. But results showed
the strongest performers paired bargains with menu innovation,
quality improvements and a smoother customer experience.
    The approach helped chains such as Yum Brands'  YUM.N  Taco
Bell attract budget-conscious consumers without resorting to
blanket discounting across their menus. Its $5, $7 and $9 meal
boxes were a hit with customers, while the chain kept
introducing new menu items that encouraged spending beyond the
entry-level deal.
    Value succeeds when it is "really clear and simple" and does
not feel like a "bait-and-switch", said Rachel Royster, director
of strategic planning and innovation at Connections, a
foodservice consultancy. 
Taco Bell reported a 7% rise in same-store sales during the
quarter, while global comparable sales at McDonald's rose 1.3%.
    McDonald's struggled despite its under-$3 menu and a $4
breakfast meal. CEO Chris Kempczinski said loyal customers
accounted for about two-thirds of the traffic shortfall and
blamed execution rather than strategy.
    Other chains found that promotions did little to offset
pressure on lower-income consumers. 
    Wendy's  WEN.O , whose Biggie Bag value meals start at $5,
reported a 7% drop in U.S. same-restaurant sales and withdrew
its annual forecast, while Wingstop  WING.O  posted a 7.5%
decline in U.S. same-store sales despite promotions including $1
chicken wings.
    Wingstop CEO Michael Skipworth said its sales sagged in
urban areas, where households typically faced more financial
pressure, even as visits climbed as much as 9% in higher-income
markets. Wingstop's stock has lost more than three quarters of
its value in the past six months. 
    "While increased noise created by competing promotions may
have made it harder for consumers to make that determination,
they appear to have also become more sophisticated in how they
evaluate the various tradeoffs and cut through the noise," said
Matt Curtis, analyst at D.A. Davidson.
    The quarter also showed that restaurants do not have to be
the cheapest option to succeed.
Restaurant Brands'  QSR.TO  Burger King was among the clearest
winners. Executives credited promotions including its "2 for $5"
and "3 for $7" offers, alongside broader efforts to improve
operations and menu quality, for strong U.S. sales growth. 
    Burger King is "doing discounts but not all the time, and
when they do, they make it creative," said independent
restaurant consultant John Gordon. "They're not doing this
insane, everyday, deep discounting."
Domino's Pizza  DPZ.O  also benefited from value-focused
offerings and loyalty initiatives that helped drive traffic and
support sales. Chipotle  CMG.N  delivered strong results while
limiting price increases to about 1% to 2%.
    "Value isn't just about discounting and price point. It's
about convenience. It's about execution. It's about menu
innovation," Chipotle CEO Scott Boatwright said.

 (Reporting by Savyata Mishra and Neil J Kanatt in Bengaluru and
Waylon Cunningham in New York; Editing by Devika Syamnath)
 ((mailto:Savyata.Mishra@thomsonreuters.com;))