McDonald's plans to cook up cheaper menu items as sales slow

McDonald's plans to offer more lower-priced menu items next year as it tries to lure inflation-weary customers struggling with the cost of living. 

McDonald's CEO Christopher Kempczinski said Wednesday during a call with Wall Street analysts that the fast-food chain recently launched an eight-week pilot program to test new affordable menu options at 1,900 U.S. locations. The company is also testing "mix and match bundles" to see which will drive sales, he said. 

McDonald's is aiming to launch the new offerings nationally in 2027, Kempczinski said. 

The news came after McDonald's earnings report, released Wednesday, showed comparable sales growth of only 0.2% at U.S. locations from July to September, down from 2.4% during the same period last year. Overall foot traffic at the chain's U.S. stores was down 4.6% from a year ago, according to data from analytics platform Placer.ai.

Kempczinski acknowledged that the company has not done enough to meet the expectations of low-income diners, who are looking for "great entry-level value."

"We talked quite extensively about how [in] Q2 we didn't land that like we needed to," he told investors. "And so that's what we're in the midst of getting resolved right now and through testing."

His comments come the day after the U.S. midterms, where affordability concerns took center stage. Many candidates campaigned on addressing cost-of-living issues and bringing down gasoline prices, which have risen 38% since the start of the war in Iran, according to AAA data.

U.S. consumer spending has remained resilient even in the face of stubborn inflation, which remains stuck above the Federal Reserve's 2% target. However, economists note that lower-income consumers are feeling particularly strapped, as a larger share of their income goes toward expenses like gas.

Low-income consumers "are disproportionately feeling the effect of higher food and gasoline prices," Ryan Sweet, chief global economist at Oxford Economics, said on Wednesday during an event in New York City.