McDonald's gives consumers more of what they want

"Hospitality is not about giving people what they ask for. It’s about giving them what they need before they know they need it," wrote Will Guidara, co-owner of the legendary New York restaurant Eleven Madison Park, in his book Unreasonable Hospitality.It's a question of getting in front of customer needs.“The magic happens when you exceed expectations without being asked,” he added.That's something McDonald's had gotten away from in recent quarters. The chain was behind the curve when it came to realizing that it had let its value proposition with customers lapse.That's something CEO Christopher Kempczinski addressed during the chain’s second-quarter earnings call.“We recognize that consumers’ value perceptions are most influenced by our core menu pricing. We’re working closely and collaboratively with our U.S. franchisees on this opportunity, and we’re developing ideas for how we might address this as an entire system,” he said.McDonald's may have been late to the party, but it has clearly learned its lesson.McDonald's doubles down on valueValue is not just about price. "Too often, 'value' is confused with 'cheap.' But true value is emotional. It’s the feeling a guest has when they leave knowing they were not just served, but seen. It’s the sense that they got more than they paid for. They gain a memory, not just a meal," Fogo de Chão CEO Barry McGowan wrote for Nation's Restaurant News.McDonald's, of course, offers a different type of value than a high-end Brazilian steakhouse, but the Golden Arches is trying to make value about more than price as well."We know that while value remains important for customers, delivering great taste and quality are their top needs, and that's at the center of everything we're doing across the restaurant experience," McDonald's Chief Restaurant Experience Officer Jill McDonald said during the chain's fourth-quarter earnings call.The chain has mixed value, taste, and an emphasis on the "more protein" trend with its latest offering, the Big Arch, which launches in the U.S. on March 2."We also began to pilot Big Arch about 1.5 years ago, and it's shown strong traction across several markets. Customers are responding to this delicious, more satisfying burger that meets their demand for something heartier while still feeling distinctly McDonald's," she added. Axios pointed out that the Big Arch goes for a bigger-is-better value-based approach."McDonald's new Big Arch Burger packs 1,020 calories with 53 grams of protein. When Axios tried it at a South Florida location, the sandwich weighed 12.7 ounces and priced at $8.19," the site shared. McDonald's has been working on finding new ways to deliver its value message.Shutterstock McDonald's knows the price matters, tooKempczinski, however, understands that value is rooted in the core menu offering and in making its everyday value menu prominent."I think what we've seen and certainly what we're trying to execute is the customer absolutely wants predictable value. And having an EVM is, I think, the way historically, we have always delivered for that customer that predictable everyday value," he shared during the Q4 call.More Restaurants Chipotle’s new consumer strategy raises eyebrowsBurger King revives iconic kids’ meal toys after 22 yearsWalmart surprises shoppers with bold new restaurant offeringHe also understands that the current economic climate requires even more."The customer is looking for in this environment, some price-pointed items that are offering particular value on top of that. And so I think you've got to be able to have the predictable value, but the customer also needs to be excited around price-pointed items that come in and out of the menu, and that's what we executed against," he added. Fast food has struggled with value perceptionWhile fast food has traditionally been an affordable luxury for most Americans, many no longer see it that way, according to a survey of 2,000 Americans from Lending Tree.Three in four Americans typically eat fast food at least once a week, but the majority (62%) say they’re eating it less due to rising prices. In fact, 65% of Americans have been shocked by the high price of a fast-food bill in the past six months.More than three-quarters (78%) of consumers view fast food as a luxury because it’s become increasingly expensive.Additionally, half of Americans say they view fast food as a luxury because they’re struggling financially.In recent years, I’ve noticed that getting a value meal at Chili’s feels different from getting one at McDonald’s or Chipotle because at Chili’s, you’re actually seated and served, not just handed a tray.McDonald's changed focus has been paying off, according to a note from UBS analysts."The fast-food chain's emphasis on value, amplified by marketing across the country, should improve consumers' perception of its value and affordability, the analysts say. McDonald's Extra Value Meals could also help it compete more effectively against Taco Bell and its $5, $7, and $9 Luxe Boxes," the analysts wrote.Related: Struggling 55-year-old sit-down burger chain closing restaurants