Along with other fast food titans, McDonald’s will have to adapt its product and marketing strategy as people eat less and opt for smaller portions. A focus on marketing smaller, low-value options could be key to riding this new wave of consumer preferences.
“McDonald’s new value menu aligns with broader economic pressures, but may also reflect a strategic response to changing consumer behavior driven by GLP-1 drugs,” wrote Citeline analyst, Greg Rossi, in a recent blog.
“As users of these medications adopt more mindful eating habits, they might opt for smaller portions or skip fast food entirely. Extending the $5 value meal and introducing low-cost bundling options could help McDonald’s retain relevance by emphasizing affordability over indulgence,” he continued.
3. The DEI Culture Wars
McDonald’s recently became the latest brand to cease some of its diversity, equity, and inclusion (DEI) initiatives amid conservative backlash in the U.S.
In January, the company said it would retire specific goals for achieving diversity at senior leadership levels and end a program that encourages suppliers to develop diversity training. The U-turn came four years after it introduced diversity initiatives after facing sexual harassment lawsuits filed by employees and a discrimination lawsuit brought by former franchise owners.
While McDonald’s decision to pull back on DEI is part of a current trend, it may inflict long-term damage on the brand, said Jack Mackinnon, Collage’s senior director of cultural insights. Collage’s America Now 2024 study showed that 81% of Americans say inclusive marketing is just as or more important to them than it was four years ago, and that number rises among Gen Z, millennials, Black, Hispanic, and LGBTQ+ consumers.
“Consumers have a low tolerance for what they see as performative efforts right now, and if brands look like they’re caving to political pressure rather than standing by their values, it could hurt them in the long run,” Mackinnon said.
Jo-Ellen Pozner, associate professor of management at the Leavey School of Business at Santa Clara University, raised another dilemma: McDonald’s DEI rollbacks conflict with its espoused corporate values, which include inclusion and “opening our doors to everyone.”
“McDonald’s stakeholders—customers, employees, and investors—will find it hard to predict what this means for McDonald’s and its brand identity. That confusion, in turn, can easily compromise McDonald’s reputation for reliability,” Mackinnon said.