McDonald’s would spend up to $8.5 billion through 2036, including $1.5 billion to $2 billion annually from 2027|Crusier|CC BY-SA 3.0

The fast-food giant is planning a major restaurant overhaul to combat declining traffic, inflation, and changing appetites among GLP-1 users.

It announced a new growth strategy that drove its stock down 6% on Wednesday, its biggest single-day drop since 2022.

McDonald’s plans to spend up to $8.5 billion through 2036 to renovate its roughly 44,000 restaurants worldwide. Starting in 2027, it expects to invest $1.5 billion to $2 billion annually.

It will upgrade or remodel drive-thru lobbies, estimated to cost $400,000 to $450,000, plus $800,000 per restaurant for new tech like the ArchIQ AI system, which can take orders in English and Spanish.

The cash-intensive changes are worrying investors. However, McDonald’s projects that such improvements will increase average annual franchisee cash flow by $100,000.

The changes
To capture market share among people using weight-loss drugs, the chain is adding protein-focused items like egg bites, along with chicken and burger bowls.

McDonald’s is also looking to win more customers by betting more on chicken and drinks. The chain plans to expand breakfast and specialty beverages while broadening its menu, aiming to add 1.5 percentage points of market share in each category over the next four years.

With rising beef prices cutting into its profits, the fast-food chain aims to expand its 20% share of the $130 billion global chicken market.

It still holds a 40% share of the $50 billion global beef category.

CEO Chris Kempczinski told CNBC that he expects inflation and flat traffic to persist.

Overall, McDonald’s is racing to bring in more consumers who are cutting back on restaurant spending amid stubborn inflation.