McDonald's expects 2025 to be “another tough year” for the fast food chain as inflation-hit customers cut back on discretionary spending.
Chief Executive Officer Chris Kempczinski said Thursday at a business gathering in Boston that the Big Mac maker is bracing for more disruption.
“We started talking about 2025, and my message to the team was, 'We need to prepare for another challenging year,'” Kempczinski said of Boston University's CEO. He said this at an event held by the Responsibility Club.
“We need to make sure we have a really strong value proposition in every market.”
Kempczinski's comment: Bloomberg News reported.
McDonald's announced in July that quarterly same-store sales fell for the first time in four years.
The company's stock price has fluctuated this year as it struggles to win back small customers turned away by soaring prices.
McDonald's stock has fallen more than 17% in July since January 1st.
However, the stock has since recovered, rising 25% since the end of July.
McDonald's stock rose 2% on Friday.
As of 10:30 a.m. ET, the stock was trading at just over $304 per share.
In recent years, McDonald's menu prices have skyrocketed due to inflation.
In some places, a Big Mac meal can cost as much as $18.
To win back consumers, McDonald's has rolled out a special menu worth $5 that includes a McDouble burger or McChicken sandwich, small fries, four pieces of Chicken McNuggets, and a small drink.
Last month, the company announced that it would extend Value Meals, which were originally scheduled to be available for a limited time at most U.S. restaurants, through December.
This is the second time McDonald's has extended a contract.
Low-cost meals were cited as the reason Lamb Weston, a major French fry supplier, cut jobs and abruptly closed its factory last week.
Kempczinski said Thursday that McDonald's aims to offer more affordable meals by including chicken-based items on its menu, since chicken is more than half as expensive as beef on a pound-for-pound basis. .
“It's easier to deliver value in chicken products than in beef products,” Kempczinski said.
Last week, McDonald's filed a lawsuit against the “Big Four” in the meat industry (Tyson, JBS, Cargill, and National Beef Packing Company) and their subsidiaries.
McDonald's alleged in its lawsuit that the two companies conspired to artificially inflate the price of beef.
The collusion turned the beef market into a “monopoly where direct buyers were forced to buy at prices dictated by (the meatpackers),” McDonald's complaint said. McDonald's complaint states that this is due to the hurt McDonald suffered as one of those buyers. Antitrust laws were created to prevent this. ”
McDonald's claims the meat packers' conspiracy dates back nearly a decade, at least to January 2015, and is still ongoing.
The lawsuit alleges that the companies' actions violate the Sherman Act, a federal antitrust law.
with post wire
