Why the $2.99 Snack Wrap is part of McDonald's new secret sauce for success
CEO and chairman Chris Kempczinski told investors Wednesday that "re-engaging the low-income consumer is critical. The restaurant giant reintroduced $2.99 Snack Wraps last month after a nine-year hiatus.
Kempczinski said on the call for its second-quarter earnings that visits from "low-income" consumers had declined across the fast-food industry.
These consumers "typically visit our restaurants more frequently than middle and high-income consumers," he added.
The chief financial officer, Ian Borden, told the call the company had been "encouraged by the positive consumer response so far" to Snack Wraps.
This "comes from pairing the right product with the right value proposition," he added.
Kempczinski added that the company's franchisees "also recognize the importance of the $2.99 price point" and had voted to extend it through the rest of the year.
The company reported diluted earnings per share of $3.14, in line with Wall Street expectations. It announced revenue of $6.8 billion, beating forecasts of $6.71 billion. Shares in McDonald's were trading around 2% higher as of 11 a.m. ET Wednesday.
Global same-store sales jumped 3.8% year-on-year, markedly higher than analysts' estimates of 2.49%.
On the call, Borden also said it recently updated its McValue menu, which now offers three meal deals for $5.
Yum! Brands — the parent company of Taco Bell, KFC, and Pizza Hut — reported an average rise of 2% in same-store sales on Tuesday.
Data from location intelligence and foot traffic data software firm Placer.ai found that McDonald's outperformed its competitors in foot traffic in the second quarter.
The firm found that McDonald's visits were up 0.8% for the quarter, even as quick-service restaurants as a whole saw visits fall 0.7%.
In late July, The Wall Street Journal reported that McDonald's would test-launch its line of "Dirty Sodas."
The offerings, inspired by its now-defunct CosMc chain, will include add-ins like dried fruit and flavored syrups and will be available in hundreds of stores nationwide beginning in September.
Business Insider previously reported that the recent spate of new drink offerings from McDonald's and other restaurants like Taco Bell, KFC, and Starbucks has been spurred on by Gen Z's love of customizable, non-alcoholic beverages.
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