Updated version 3 - McDonald's warns that the recovery of customer flow may lag; announces an $8.5 billion investment plan

Full rewrite, add executive comments in paragraphs 4 and 5, and analyst comments in paragraph 10

Anuja Bharat Mistry/Waylon Cunningham

Reuters, Sept 23 - McDonald's MCD.N warned on Wednesday that as long as inflation remains high, customer traffic in key markets is likely to stay flat, even though the company has announced an $8.5 billion support plan for franchisees and a series of long-term growth initiatives. Its share price still dropped 5%.

This warning adds to investor concerns that McDonald's business recovery may take longer than expected—even as the company launches its new "NEXT" strategy to revive growth, following several consecutive quarters of slowing sales and increasingly intense competition from value-focused rivals.

Last month, McDonald's U.S. sales growth in the second quarter missed expectations (link), and the company said execution slip-ups hindered its efforts to win back lower-income customers who have been dining out less.

On Wednesday, new U.S. head Skye Anderson (link) acknowledged these shortcomings, saying McDonald’s has room to improve restaurant operations due to “ongoing execution” issues.

“Companies able to generate more demand and meet that demand more efficiently will be the ultimate winners,” CEO Chris Kempczinski said at the investor meeting.

In June, McDonald’s introduced its "NEXT" strategy, focusing onenhancing food quality, the service experience, value, and innovation. On Wednesday, executives detailed for the first time how the plan will be implemented.

The plan also includes streamlining operations, modernizing restaurant designs, investing in employee training, and expanding the use of its AI-powered restaurant operating system, ArchIQ—which can automate tasks such as drive-thru ordering.

Anderson—who was appointed U.S. president last month to lead the company’s transformation strategy—said Wednesday that McDonald’s is also responding to shifting consumer preferences, including demand from GLP-1 users for higher-protein options and more flexible portion sizes.

She added that the company is exploring products like bowl meals, grilled chicken, and egg bites to expand protein-focused menu choices across breakfast, lunch, and dinner.

“Consumers are looking for more than just price when making decisions, and McDonald's needs to give them reasons to visit beyond promotions,” eMarketer analyst Suzy Davidkhanian said.

As part of the plan, McDonald’s outlined an $8.5 billion support package for franchisees over the next decade and set a new goal for store-level productivity and operating margins to reach the mid-to-lower end of about 50% by 2030.

The company expects the strategy to boost restaurant-level efficiency by 250 basis points, delivering roughly $100,000 in additional annual cash flow per U.S. store on average.

Of the $8.5 billion investment, about $5 billion will be used by 2030 via rent relief and capital support for franchisees.

The burger chain expects store expansion to contribute around 2.5% to total system sales growth in 2027, falling to about 2% by 2030.

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