The rise caught McDonald’s, and Americans looked to pay for fast food. But McDonald’s thinks they have a solution: cheaper food.
McDonald’s reported on Monday that sales at US stores open at least a year fell 0.7% annually in the latest quarter. The decline is due to fewer customers visiting the fast food company’s restaurants. It’s not just McDonald’s: Starbucks, Burger King, Wendy’s and other competitors are reporting fewer meals and fewer sales as consumers spend less money on food. out. The difficult environment facing McDonald’s is not unique to the US: Global sales fell by 1% in stores open for the year. This is the first time since the last quarter of 2020 that sales have fallen significantly.
A number of factors hindered McDonald’s performance in the most recent quarter, including difficulty making year-over-year comparisons. At the same time last year, McDonald’s sales were up 10.3%, but only because of the popularity of the sweet purple drink “Great Mas Shake” to celebrate Grimmus’ “birthday”. The milkshake became a sensation when a TikTok user posted a video of himself drinking it and pretending to be sick. But McDonald’s also said in recent quarters that some customers, particularly from low-income households, have rejected products that many consider good value.
“We warned you last year that consumers, especially low-income families, would be more demanding,” CEO Chris Kempczinski said on a conference call with investors. on Monday morning, and those pressures will intensify as time goes on. And in December the company announced a comprehensive strategic plan to win back price-sensitive customers, focusing on $5 gift voucher launched earlier this summer.
The budget item is starting to show signs of popularity, but it was very influential in the last few weeks and was not very visible in the results of the last quarter. On Monday, the company said sales of the $5 menu item exceeded expectations. But Kempczinski said by phone that the company is still working, saying “it’s clear that our leadership in terms of values has been reduced.”
“As consumers become more aware of their shopping, we are focused on delivering value every day and accelerating our strategic growth drivers like chicken and loyalty,” Kempczynski said. the story in a story. Kempczynski Chinski also said that McDonald’s will continue to change as customers’ needs change. He said McDonald’s has also shifted its focus to chicken, and now sells as much chicken as chicken in its restaurants. The company is also testing a new bag called the Big Arch, which includes two patties, cheese, crunchy toppings and hot sauce. “The hallmark of a great company is its ability to perform well in good times and bad, regardless of market conditions,” Kempczinski said on an investor call. “We are committed to reviving our pricing structure in all major markets, regardless of market conditions.” What are the markets like? “It won’t happen overnight. “But it will happen.
Big buyers are angry
In the early days of the US inflation crisis, restaurants and food companies such as McDonald’s and Coca-Cola said that consumers were willing to accept the continued rise in prices, and were willing to spending more on their favorite foods, snacks and snacks. But starting last year, things started to change. McDonald’s will show what its competitors have seen: customers don’t like higher prices.
Food prices continued to rise last year, but most of the increase came from eating out, not at supermarkets, but at restaurants and fast food outlets. This means that eating out is a luxury for some Americans. Especially since McDonald’s is the subject of some customers’ anger. Last year, a social media post featuring an $18 Big Mac meal caused an uproar online, with many consumers arguing that corporate greed was causing inflation for ordinary Americans. Apparently, only one truck stop in Connecticut charges that price, twice the national average. The Macitanara president later apologized and asked the corporations to stop working.
Although the viral ad was the last straw for McDonald’s customers, Americans have been strongly against the company ever since. The company’s sales and profit margins, which have been increasing in the years since the pandemic hit, have now returned to pre-COVID levels. McDonald’s said Monday that while prices will continue to rise, it will continue to look for ways to increase profits by removing some of the extra costs despite customers’ demand for more value. Shares of McDonald’s ( MCD ) rose more than 3% on Monday, but fell 12% against the market’s gains this year.
