Burger giant McDonald’s reported its first sales decline since the early days of the coronavirus pandemic on Monday as it struggles to attract cash-strapped customers due to rising menu prices.
The Chicago-based fast-food chain, which introduced a $5 value menu last month to lure customers, said second-quarter U.S. same-store sales fell 0.7 percent and revenue was flat, missing analysts’ expectations of a 0.8 percent increase.
Same-store sales in the U.S. rose 10.3% last year. Sales in international markets fell 1.1% compared with expectations of a 1.69% increase due to weakness in France.
The sector recorded growth of 11.9% last year.
McDonald’s reported sales of $6.5 billion, up 2% from a year ago, but falling short of analysts’ expectations of $6.63 billion.
McDonald’s second-quarter adjusted earnings per share were $2.97, down from $3.17 last year.
Rising prices have led customers around the world to cut back on spending on fast food, according to McDonald’s CEO Chris Kempczinski, who told investors on an earnings call on Monday that consumers are “becoming more cautious about their spending.”
Kempczinski said the company is focused on “execution excellence” in its efforts to provide consumers “trusted, everyday value” while “accelerating strategic growth drivers like chicken and loyalty.”
He expressed confidence that the company’s strategy was “the right strategy for our business.”
McDonald’s shares have fallen 15% since Jan. 1. The stock was flat in pre-market trading Monday.
Due to persistent inflation Low income Encourage diners to choose affordable food options at home.
Earlier this summer, McDonald’s offered customers a $5 deal that combined popular menu items like a burger or chicken sandwich with fries, nuggets and a soft drink.
The popularity of this great deal has led to an increase in customer visits to McDonald’s restaurants in the United States.
The initial plan was to run the promotion for one month, but the company extended the deal after realizing it helped drive foot traffic to its stores.
But some franchisees worry that the promotion will entice customers willing to pay more for more expensive meals to switch to cheaper options. According to Bloomberg News.
Inflation-weary customers are disgusted by the chain’s skyrocketing menu prices, which include $18 for a Big Mac and $7.29 for an Egg McMuffin in Connecticut.
With post wire
