McDonald’s announces hand-breaded chicken expansion and new menu items

McDonald’s is planning a major menu overhaul as it spends $8.5 billion over the next decade to modernize its global network of restaurants.

With fast-food customer traffic flat across major markets including the U.S., McDonald’s Chairman and CEO Chris Kempczinski told investors at the company’s Chicago headquarters that future growth depends on grabbing market share from competitors and raising store-level productivity. To achieve this, the fast-food giant plans to improve kitchen operations and automate administrative tasks like shift scheduling and inventory management.

“The winners will be the companies that create more demand and deliver it more efficiently,” Kempczinski said.

McDonald’s shares fell 5% during afternoon trading on Wednesday, marking their largest single-day percentage drop in six years, as investors reacted to the eye-popping cost of updating 46,000 global stores.

On the product front, McDonald’s stated that hand-breaded chicken—currently being tested across 10,000 restaurants in Asia and a small group of outlets near Chicago—has lifted both overall sales and consumer quality ratings. Major competitors like Chick-fil-A and KFC already feature hand-breaded chicken. The company plans to expand these tests to additional U.S. and Irish markets next year.

McDonald’s also plans to roll out grilled chicken sandwiches and wraps across the U.S. and other international markets, while experimenting with items such as egg bites and bowls to cater to consumers seeking higher protein content and varied portion options.

Skye Anderson, the president of McDonald’s USA, noted that roughly 30 million Americans now use GLP-1 weight loss medications and are seeking smaller, protein-dense options as a result. However, internal research indicates that 60 million Americans are actively looking to add more protein to their daily diet.

“This is an opportunity. We need to keep giving them more reasons to make McDonald’s their first choice,” Anderson said at McDonald’s investor day.

McDonald’s said the restaurant modernizations will feature dedicated lockers for delivery orders, enlarged play areas, updated kitchen layouts, and visible coffee preparation stations to elevate quality perceptions. Scales designed to ensure order accuracy—already deployed at 10,000 locations worldwide—will be installed in 20,000 stores by 2028, according to the company.

The business is rolling out its ArchIQ platform, developed alongside Google, which utilizes artificial intelligence to boost order accuracy while automating routine tasks like inventory tracking and shift scheduling. Meanwhile, Archy, the company’s AI-powered drive-thru ordering system, can now process orders in both English and Spanish with a 90% accuracy rate.

Archy could eventually save at least 50 labor hours per week in a typical McDonald’s restaurant, Chief Financial Officer Ian Borden stated. However, he noted that the strategy is not intended to trim total staffing levels, but rather to allow workers to focus on hospitality or labor-intensive tasks such as hand-breading chicken.

Kempczinski noted that customer feedback regarding Archy during initial trials has been positive because it helps ensure orders are accurate.

“It’s not AI is bad or AI is good. We try to be really thoughtful about how we use it,” he said.

McDonald’s is also launching new employee training programs focused on hospitality and food quality, according to Tiffanie Boyd, McDonald’s chief people officer. The experiential training will show workers what a perfectly prepared Big Mac tastes like and encourage friendlier customer interactions.

At the same time, McDonald’s remains focused on value offerings. Kempczinski noted that low-income consumers, defined as U.S. households earning $45,000 or less, continue to visit fast-food outlets, though less frequently than before. While bundled offerings like the $5 meal deal have proven effective, the chain is exploring ways to offer entry-level prices on a core menu of items in the U.S., similar to structures used in European and other international markets.

“This is the environment that we’re in right now. You have to be on your game and deliver that value,” Kempczinski said. “The pressure around cost of living isn’t going away.”

U.S. franchisees typically spend up to $450,000 every 10 years on required store remodels. Under the company’s new blueprint, franchisees will have to spend an additional $800,000 over time, though McDonald’s will cover a portion of that expense through capital support and rent relief.

Borden explained that capital investments will be introduced gradually when individual franchisees and markets are ready for them. Once completed, operational efficiency gains will deliver roughly $100,000 in additional annual cash flow benefits to the average U.S. restaurant, a portion of which can be reinvested into operations, Borden said.

“We’d love to see it going into hospitality to elevate the experience with our customers,” Borden said.