The $5 Sausage McMuffin meal didn’t do the trick. Neither did the mix-and-match deal that let customers choose, say, the Filet-O-Fish and Chicken McNuggets for $6.

McDonald’s CEO Chris Kempczinski has been trying to convince customers squeezed by inflation or tempted away by competitors’ burgers and chicken sandwiches to return to the Golden Arches. But so far, the company’s barrage of new meal deals and aggressive marketing to promote them have come up short.

In each quarter this year, McDonald’s U.S. growth has shrunk and customer visits have reportedly dropped. Wall Street has taken notice: McDonald’s shares are now down 32% from an all-time high in February.

What’s worse, some of its efforts to repair those downward trends have backfired. Kempczinski conceded in August that too many new menu and deal launches had overwhelmed its restaurants and harmed service. The onslaught irked franchisees, a crucial constituency, just as McDonald’s was asking them to spend $1 million per store on remodels and upgrades.

The CEO defended his plan this summer, arguing that the strategy was good and only the execution was bad. But McDonald’s paltry results of late suggest there is more to its malaise than just a few tactical errors. In its most recent quarter, McDonald’s reported U.S. comparable sales growth of 0.8%, hardly a catastrophe but a continuation of its slowing growth and an underwhelming performance, especially compared to the 8.5% jump at resurgent rival Burger King.

“We must be the first choice for more customers more often,” Kempczinski told analysts at McDonald’s investor day at its Chicago headquarters in September. There, he fleshed out the restaurant chain’s global business strategy, called “McDonald’s > Next,” which aims to serve better food, improve service, and make restaurants easier to run. But investors seem skeptical; for now they see more tarnish than gleam in the Golden Arches.

Rising beef costs, fewer customers

What’s worried investors most about McDonald’s financial performance, particularly in the U.S. where it generates 40% of revenue or $10 billion a year, is a drop in store visits. While McDonald’s doesn’t report traffic numbers, analytics firm Placer.ai estimates U.S. visits fell 4.5% in the first half of 2026. (A company spokesperson said McDonald’s is “unable to corroborate or validate third-party data.”)

McDonald’s risks losing more customers if it has to raise prices to contend with beef inflation. The U.S. Department of Agriculture reports that beef prices in August were 5.9% higher than a year earlier. Kempczinski said last month that beef costs had nearly doubled over the last five years in the company’s biggest markets, an acute problem for McDonald’s given its lower-income clientele. He’s said price hikes are on the table, but the company lost customers after it raised prices during the COVID crisis, a lesson etched in his mind.

Plenty of quick-service restaurant chains, notably Wendy’s, Popeyes, and Papa John’s, are also struggling in this environment. But there are winners in the sector, and those that are thriving are doing so by remodeling their restaurants for efficiency and refreshing their menus.

Case in point is Burger King, owned by Canadian conglomerate Restaurant Brands International. As part of its “Reclaim the Flame” turnaround plan (a decidedly catchier name than “McDonald’s > Next”), Burger King has overhauled half its restaurant fleet in four years with more to come. Its Whopper sales have jumped 20% this year after the chain revamped its flagship burger for the first time in a decade by upgrading its bun, mayo, and packaging.

Burger King’s marketing has also been particularly deft: when Kempczinski awkwardly bit into the Big Arch Burger, which he called a “product,” in a promotional spot, Burger King countered with President Tom Curtis eating the Whopper in a natural, relaxed way.

Franchisees hold the key

To be sure, McDonald’s remains the dominant fast-food operator, with 11% of the U.S. fast-food market, according to a ranking in QSR magazine. Its U.S. sales are five times those of Burger King, the second largest hamburger-oriented chain in the U.S. Still, McDonald’s is feeling the pressure. “To succeed…growth must come from capturing greater (market) share,” Kempczinski told investors.

Renovating restaurants is part of his plan to lure customers back to McDonald’s, but to do that he needs buy-in from franchisees, who own 95% of all restaurants.

Under McDonald’s agreement with franchisees, store operators pay the fast food giant rent, fees, and royalties, and the parent company gets a strong say in restaurant locations and standards. Franchisees can opt out of McDonald’s directives, and, indeed, just 60% to 65% of restaurants implemented its “under $3 menu” this summer amid fears of lower margins. McDonald’s recently pushed back its target of renovating 50,000 total restaurants to 2028 from the 2027 deadline it set in 2023. The CEO has said McDonald’s is having “constructive” discussions with franchisees to get them on board.

At investor day, Kempczinski announced an $8.5 billion 10-year plan to help franchisees with capital support and rent relief as they contend with higher food, labor, and equipment costs. Some $5 billion of that sum will be deployed by 2030. Shares fell on news of the spending, but BTIG’s Peter Saleh said in a note that it was key for McDonald’s to align franchisees behind the next-generation upgrades, according to Benzinga. UBS analysts praised McDonald’s plan as “achievable with solid execution,” and said it was “critical to franchisees’ health and their ability to reinvest long term.”

When it comes to its menu, McDonald’s hasn’t been asleep at the wheel; in fact, it’s been experimenting a lot.

At the top of its priority list on investor day was winning market share in the surging chicken and beverage markets. The company has been testing hand-breaded chicken and, for users of GLP-1 weight-loss drugs, protein-rich grilled-chicken bowls in the U.S. It also introduced a new line of crafted sodas and energy drinks with Red Bull. McDonald’s aims to raise its market share in the global beverage and chicken markets by 1.5 percentage points each by 2030.

Like every other major company, McDonald’s is looking for ways AI can improve its operations and service. It is weighing giving restaurant workers access to chatbots and testing voice-AI ordering at the drive-thru. Such plans could give the Golden Arches an edge; Deutsche Bank’s Lauren Silberman wrote that AI implementation could improve the efficiency and profitability of McDonald’s restaurants in a way that would be harder for smaller players to replicate.

Kempczinski, who joined McDonald’s in 2015 as a top executive in charge of strategy and innovation, is generally well-regarded by Wall Street and has navigated the periodic slumps that come with the industry. His previous multi-year strategy, called “Accelerating the Arches,” was a success, increasing the number of orders placed digitally, building McDonald’s loyalty program membership, and culminating with several years of sales growth. Still, the CEO may have a smaller margin for error now. “We’re committed to making sure that our restaurants don’t fall behind like they did previously,” he told investors.