McDonald’s reported a surprising global sales decline, the first in 13 quarters, as higher Big Mac prices deterred more cost-conscious customers from visiting the fast-food giant’s outlets.
Persistent inflation has forced lower-income consumers to switch to more affordable home-cooked meals. This shift has prompted fast-food chains like McDonald’s, Burger King, Wendy’s, and Taco Bell to rely on special offers to drive customer traffic.
Global sales fell by 1 percent in the second quarter, compared to analysts’ average estimate of a 0.5 percent increase. Total revenue rose by 1 percent.
In June, McDonald’s launched a special 5-dollar meal deal at most of its United States (U.S.) locations. The plan is to extend this offer into August to lure back customers who have stopped dining out. CEO Chris Kempczinski noted that consumers have become more selective in their spending habits.
“The biggest hit for McDonald’s is that low-income consumers have significantly reduced their visits, and this more than accounts for the decrease in traffic that McDonald’s typically experiences during tough times,” said Edward Jones analyst Brian Yarbrough.
Companies like McDonald’s and Starbucks have also faced boycotts from consumers due to their perceived associations with the Gaza conflict, impacting their sales in Middle Eastern markets, Klix.ba writes.
E.Dz.
