McDonald’s Unveils Genius Strategy to Boost Sales: No More Silver Bullet Price Promotions!

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By opting not to rely heavily on price promotions as a temporary measure for boosting growth, McDonald's has successfully achieved a notable 14% increase in revenue.

During a call with investors today (27 July), the company's CFO, Ian Borden, recognized the difficult macroeconomic climate and the declining consumer sentiment in various markets. He commended the franchisees for their commitment to long-term success, as they refrained from seeking immediate benefits through price reductions, understanding that both parties are dedicated to making investments for the future prosperity of the business.

The company has achieved significant success through this strategy, as global comparable sales have surged by 11.7% year-over-year in the three-month period ending in June. Revenues have also witnessed a notable increase of 14%, totaling $6.5 billion (£5.1 billion), compared to the same period in 2022. According to CEO Chris Kempczinski, this success is not a result of singular promotional efforts or quick fixes.

The company's current focus is on achieving long-term success. One way they are doing this is by implementing effective marketing strategies to uphold and strengthen their brand.

According to Kempczinski, the most recent quarter served as proof of the company's commitment to improving their marketing efforts. The company has been undergoing a transformational process called "Accelerating the Arches", which has highlighted the importance of marketing in driving sustainable growth.

The more customers love our brand, the more they love our food.

Chris Kempczinski, McDonald’s

Last month, Joan Colletta, a member of the global brand leadership team and senior director of marketing transformation, emphasized in an interview with Our Website that McDonald's has made marketing a pivotal aspect of their business strategy in recent years.

In fact, during a conversation with investors today, CFO Borden highlighted that the brand played a central role in the quarter's performance.

During the call, McDonald's highlighted the success of bringing back the brand character Grimace in the US as an example of the power of marketing. To commemorate Grimace's 52nd birthday, the company introduced a special meal and milkshake that could be enjoyed at American restaurants. Grimace's presence on TikTok has garnered an impressive 3 billion views.

Another noteworthy campaign mentioned during the call was the celebration of Chicken McNuggets' 40th birthday in the UK. The company's leadership recognized the UK team for their strong performance despite challenging consumer sentiment in Europe, commending them for their success in such circumstances.

The UK team's success in driving growth was acknowledged by management. However, the business has faced heightened scrutiny in the UK. According to a recent report by the BBC, over 100 employees, including individuals as young as 17, have come forward with allegations of groping and harassment during their employment at the company. Although Kempczinski expressed today that the brand is currently thriving, YouGov's BrandIndex tool indicates that it has suffered reputation damage in terms of health in the UK.

According to YouGov BrandIndex, McDonald's index score has shown a decrease over the past three weeks. This score combines various measures such as impression, value, and recommend scores. The initial allegations were released on 18 July. Prior to this, McDonald's BrandIndex score was 9.3. However, by 24 July, it had dropped to -1.4. As of yesterday, there has been a slight recovery, with the score standing at 2.6.