TL;DR:
- McDonald’s chicken products now equal beef burger sales, each generating $25 billion annually.
- The fast-food giant plans to expand its chicken offerings by 2026, introducing new items like wraps and tenders.
- Despite a global sales increase, McDonald’s aims to focus on affordability after noting a shift towards home-cooked meals among lower-income customers.
McDonald’s Corp. has reached a significant milestone, with its chicken products now matching beef burgers in sales, each contributing $25 billion annually to the company’s revenue.
This revelation came from CEO Chris Kempczinski during a discussion on the company’s fourth-quarter performance. Kempczinski also shared plans to boost McDonald’s presence in the chicken market by 2026, with the expansion of the McCrispy platform to include wraps and tenders.
The Chicago-based fast-food leader reported a positive trend in sales both in the U.S. and internationally in the fourth quarter, as it gears up to tackle affordability concerns and refine its product offerings. Specifically, U.S. sales saw a 4.3% increase from the previous year, while International Operated Markets experienced a 4.4% rise in revenues compared to the fourth quarter of 2022.
The company attributed the growth in comparable U.S. sales to a combination of strategic menu pricing, effective marketing campaigns, and continued expansion in digital and delivery services. Notably, markets in Canada, Germany, and the U.K. demonstrated robust sales, which helped balance out the less favourable performance in France.
For the fiscal year, McDonald’s celebrated an 8% increase in sales over fiscal 2022, reaching over $6.4 billion, with net income rising by 7% to more than $2 billion. However, Kempczinski acknowledged that the quarter’s sales did not meet expectations for the first time in nearly four years, partly due to higher menu prices.
Looking ahead to 2024, Kempczinski highlighted a strategic shift towards enhancing affordability. This change comes in response to observations that customers earning less than $45,000 a year are increasingly opting for home-cooked meals over dining at McDonald’s, where combo meals can cost up to $18 in some regions.
Additionally, the once-popular Dollar Menu no longer features items priced at $1, as noted in the Akron, Ohio, market last fall, signalling a departure from the brand’s traditional value offerings.
