McFlop: How McDonald's Big Arch video went viral but failed to flip its sales story

The social media frenzy, however, does not seem to have translated into a commensurate sales surge for the Big Arch, which features two quarter-pound beef patties and three slices of white cheddar cheese tucked between a toasted sesame and poppy seed bun. It’s one of the most expensive items on the menu, costing $10.09 at the McDonald’s around the corner from my office in New York.

The company told the Wall Street Journal that early sales were beating expectations, but data provider Placer.ai found that foot traffic rose a modest 2.2% in the week of the Big Arch’s launch in the US on 3 March. “These results may suggest that consumers are becoming increasingly selective in their spending,” it reported.

The disconnect may in part reflect the K-shaped economy at work, which has further split consumers into haves and have-nots. That dynamic makes it more challenging for companies focused on mass consumption.

And there is perhaps no brand that depends more on its ubiquity than the so-called Golden Arches.

The company says it serves about 90% of the US population every year. “McDonald’s has to target different customer groups, and they are overlapping less and less,” said Morgan Stanley restaurant analyst Brian Harbour.

The result: Playbooks that once worked across all these groups are at risk of breaking down when opposing sides of a customer base are living entirely different economic realities.

For decades, successful fast food chains have employed a barbell pricing strategy. On one end are their value items—think McDonald’s ‘Dollar Menu’ of the past—and on the other are premium items such as the Big Arch. When times are good, customers are lured in by value items and are tempted to trade up. But when times are tough, premium products can offset lost business by attracting higher-income consumers who trade down into the brand from the likes of, say, a Shake Shack.

That does not seem to be happening this time round. Although lower-income consumers are increasingly eating at home, McDonald’s has said that higher-end consumers who are trading down have not been making up for those declines.

Meanwhile, those struggling but still spending are hunting for bargains. The Wall Street Journal reported last week that when consumers are eating out, they are purchasing items with deals attached more now than at any time in the last half century. And at the top of the food chain, research firm Black Box Intelligence said last month that fine dining was the top-performing segment in the restaurant space in four of the last five months.

Balancing that barbell has always been a delicate task. When I was covering McDonald’s more than a decade ago as a reporter, its management team ran into trouble when the two sides of the barbell crept further apart, making it harder for consumers to make the jump from a Dollar Menu item to a $4.80 Big Mac.

In the last few years, the barbell has fallen out of balance again—this time because prices crept up too far and too fast as franchisees tried to keep up with inflation after the covid pandemic started to wind down. That left very little on the low-end to convince consumers McDonald’s was still a place to find good value.

The company has realized its mistake and has since 2024 been on a mission to reclaim its affordability image. It started by launching $5 meals and in 2025 expanded to $1 add-ons.

The efforts are starting to pay off, with the company reporting last month that during the fourth quarter its sales grew at the fastest pace in more than two years. “As I’ve said before and I will say again, McDonald’s is not going to get beat on value and affordability. It’s in our DNA,” Kempczinski said on the company’s earnings call. The Wall Street Journal has reported that next month the company will push its value image even further, launching items for $3 and less, as well as $4 breakfast meals.

Against this backdrop, it’s easy to see why Kempczinski’s burger-eating gaffe took hold of the internet. It’s the K-shaped economy personified. As he took a performative nibble of the Big Arch, Kempczinski looked to many like just another well-paid CEO who had lost touch with his struggling customer base. ©Bloomberg

The author is a Bloomberg Opinion columnist covering corporate America.