Snack Wrap redux: How McD's is refreshing its menu to lure back customers

McDonald's is reviving fan favorites, spicing up its menu and emphasizing low-cost items to bring inflation-weary customers back to the Golden Arches.

The world's largest restaurant chain recently announced it was bringing back the popular Snack Wrap, which makes its return to McD's outlets on July 10, along with a new, limited-time Spicy Egg McMuffin sandwich, which debuted on July 8. The refreshed menu comes as the company looks to boost sales as budget-conscious consumers pull back on spending.

Same-store sales at McDonald's outlets in the U.S. declined 3.6% in the first quarter, the biggest drop since the COVID-19 pandemic closed stores nationwide. At the same time, traffic among low-income customers was down "nearly double digits," CEO Chris Kempczinski said on the company's May earnings call, reflecting a customer base that the company acknowledged is still feeling the effects of inflation.

McDonald's isn't the first fast-food chain to use promotions to drive business, but it has long been among the most adept at tweaking its menu and pricing, while its scale makes it a bellwether for customer tastes. In January, for example, it introduced the McValue menu, which includes the $5 meal deal, along with a "buy one, add one for $1" deal, as the company leaned into affordable offerings.

McDonald's is reacting to a number of economic and competitive pressures, said Matthew Todd, a director at S&P Global Ratings. Chief among them is continuing to deliver value to low-income consumers in a time of economic uncertainty.

"This isn't anything new, but I think it's a continuation of this pursuit of regaining the consumers' trust," Todd said.

Sara Senatore, a research analyst at the Bank of America, told CBS MoneyWatch that McDonald's move to expand its affordable offerings is an attempt to "stay relevant" with low-income consumers, who are "under much greater pressure than other cohorts."

Other fast-food chains and restaurants also have seen weaker sales as consumers battered by higher prices and the general cost of living look to save cash. For McDonald's, which has over 35,000 locations nationwide, the difference now is it's not outperforming competitors as much as it once was, Senatore said.

"Their same-store sales versus their direct competitors have been much more similar than different," she said. "Whereas, if you look at its long-term history, McDonald's has historically outpaced their competitors."

McDonald's did not respond to CBS MoneyWatch's request for comment on the strategy behind its menu changes.

Perhaps the most highly anticipated new menu item is the Snack Wrap, which is returning to McDonald's establishments nationwide on this week after a nine-year hiatus. The wrap, which consists of a white-flour tortilla filled with chicken, shredded lettuce and cheese, was nixed in 2016, sparking a social media campaign by fans lobbying for its return.

"Given that they're looking for sales drivers, it makes sense that they would go to their archives, if you will," Senatore said.

The revived Snack Wrap will come in two flavors — Ranch and Spicy — and will be priced at $2.99, according to a McDonald's spokesperson. The main protein will consist of chicken strips — easier to prepare, and thus less labor-intensive, than the type of chicken McD's previously used in the wrap, which required more cutting, Senatore explained.

Reviving the Snack Wrap is a strategic decision on McDonald's part given the item's cult following. Customers went so far ast to start a Change.org petition garnering more than 19,000 signatures urging McDonald's to bring back the Snack Wrap.

"Bringing back a product that customers really want to have come back, you typically have higher rate of success," Senatore said.

McDonald's is also introducing a new take on its classic Egg McMuffin, with a trio of limited-time breakfast sandwiches featuring spicy pepper sauce. The new items coincide with the 50th anniversary of the Egg McMuffin, a McDonald's staple that consists of egg, cheese and bacon on an English muffin.

"Limited-time offerings are always something in the toolkit for quick service restaurants to drive traffic," Todd said.

Other menu tweaks include a new home for the Daily Double, one of McDonald's burger offerings. The Daily Double will now be part of the the McValue deal, where it will be bundled with fries, Chicken McNuggets, and a small soft drink for $6 or $7, depending on the location.

McDonald's has also upped its chicken offerings. In May, the chain launched a new item called McCrispy Strips nationwide, the first time since 2021 McDonald's debuted a new permanent menu item in the U.S, according to a company statement.

Todd said McDonald's and other industry players are emphasizing chicken meals given its popularity and that it is significantly cheaper than beef, which rose to record prices in May.

"We've been seeing tons of chicken offerings, and just chicken... in general being very successful," he said.

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