United States: McDonald’s has announced its first decline in global sales in more than three years as consumers who are weary of inflation cut back on eating out and look for less expensive options.
The fast food behemoth McDonald’s said on Monday that its global sales decreased by 1 percent in the April–June quarter. This is the first decline since the final quarter of 2020, when the COVID-19 pandemic and governmental restrictions forced millions of people to stay at home and closed operations.
Sales at licensee-run outlets in so-called international developmental licensed markets fell by 1.3 percent as a result of boycotts in the Middle East over the fast-food chain’s alleged backing of Israel and poor customer mood in China.
Chris Kempczinski, the CEO of McDonald’s, stated that after previously profiting from customers who “traded down” to the fast food chain from more costly restaurants, consumers had become “very discriminating” about their spending.
“We are seeing trade down, but what we’re seeing is that the loss of the low-income consumers is greater than the trade-down benefit,” Kempczinski said.
“You’re seeing with that low-income consumer, in many cases, they’re dropping out of the market, eating at home and finding other ways to economies,” Kempczinski added.
Although consumers still regarded McDonald’s as the greatest fast-food chain for value, Kempczinski claimed that the company’s competitors’ “value leadership gap” had closed.
Executives announced that a $5 lunch deal that was introduced in June had sold out faster than anticipated and that most US locations will continue to offer the promotion past August.
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