By Heather Haddon

In the burger business, 2026 has become the year of the supercharged value menu.

McDonald's this year has doubled down on value meals and other low-cost menu items, striving to reclaim its reputation for affordable food. Executives on Thursday said that the efforts were helping draw diners, especially lower-income consumers, and that the chain planned to keep pushing deals.

"Thank God we've got that in place," said Chief Executive Chris Kempczinski during an investor call. "You need in this environment value and affordability to be a strength."

Restaurants are duking it out for business as the rising cost of gasoline and other expenses have many consumers cutting back. Many chains have taken a hit this year, with companies including Shake Shack, Wingstop and Papa John's reporting disappointing sales in recent weeks.

McDonald's, the world's biggest burger chain, has been hammering value over the past two years, and executives said the efforts are paying off. The company reported Thursday first-quarter revenue and profit that outpaced analysts' forecasts, with same-store sales rising by 3.9% in the U.S. Its shares climbed slightly.

The Chicago chain recently cut the price of its combo meals to appeal to budget-minded consumers, and this month began rolling out new cold drinks, pitched as lower-priced alternatives to crafted beverages that have delivered hits for such chains as Starbucks.

Conditions in the fast-food business were already tough and haven't improved this year, Kempczinski said. Lower-income consumers feel particularly pressured, executives said, and while McDonald's is gaining share in the burger sector, growth in the industry is likely to stay constrained.

Other chains that tend to cater to higher-income consumers, including Starbucks and Chipotle, are doing relatively better.

McDonald's burger rivals are competing for the same shaky consumers. Burger King earlier this week reported a 5.8% increase in U.S. same-store sales for its most recent quarter, the biggest increase in roughly two years.

Executives credited the chain's own value options, along with an upgraded Whopper and a promotional campaign that encouraged customers to call up its U.S. president.

New York-based Shake Shack on Thursday reported revenue and earnings below expectations, squeezed by sluggish traffic and rising beef costs. Executives said visits took a hit from declining tourism and war in the Middle East. The company's stock plunged 28%.

Shake Shack is promoting $1, $3 and $5 deals to try to boost business. Wendy's, due to update investors Friday, is expected to report declining quarterly sales and profit from last year.

McDonald's executives said U.S. consumers are gravitating toward its new $3 and less menu, and maintaining traffic means offering affordable menus in all of its markets. In France, where executives said the chain lacked a roster of daily discounts, visits suffered, and sharper price points are now being added.

The company said rising costs, particularly for beef, have stressed franchisees' profits. Cash flow for U.S. McDonald's operators was stable last year, but pressures have continued to grow.

McDonald's is tapping its global supply chain to help mitigate inflation for franchisees, Chief Financial Officer Ian Borden said, and driving sales through the chain's promotions is the best way to help operators' profits.

"The formula we have in place is sustainable," Borden said.

Write to Heather Haddon at heather.haddon@wsj.com

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(END) Dow Jones Newswires

May 07, 2026 11:33 ET (15:33 GMT)

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