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Fewer people seem to be buying food at quick-service restaurants (QSR).
The same seems to be the case after companies like Yum! Brands, Starbucks and McDonald’s provided quarterly updates on their businesses.
The parent company of Kentucky Fried Chicken, Taco Bell and Pizza Hut announced a 3% decline in overall same-store sales in the first quarter, which Yum! Brands CEO David Gibbs said in the company’s press release on Wednesday.
Hmm! Brands, the parent company of KFC, Taco Bell and Pizza Hut, said overall same-store sales contracted 3%, which was “in line with expectations.” (Karen Breyer/AFP/File/Getty Images)
“Yum!” CFO Chris Turner told analysts and investors watching the earnings call. The brands said, “Same-store sales declined in the first quarter due to a rebound from the same period last year, a return to a more normal inflationary environment, and individual consumer demand pressures, including in markets affected by the Middle East conflict. “It will be the most difficult period.” ”
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Of Yum’s three major brands, Pizza Hut and KFC both saw same-store sales decline in the first quarter, with the pizza chain down 7% and the fried chicken chain down 2%. However, the same metric rose 1% at Taco Bell, the company said.
“When it comes to international consumers, they’re probably more focused on value than they have been in the past few quarters,” Gibbs said of KFC. “The same thing is happening in the United States.”
During the financial results announcement, Yum! The brand said its chain was “fueled by two years of solid same-store sales growth and strong quarter-end momentum.”
Starbucks’ global same-store sales fell 4% in the second quarter. The airline said in a statement Tuesday that this was “driven by a 6% decline in comparable transactions, partially offset by a 2% increase in average tickets.”
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“The headwinds discussed last quarter continue in many major markets. We continue to feel the impact of consumers becoming more cautious, especially for our infrequent customers. Additionally, the deteriorating economic outlook is weighing on customer traffic, with an impact that is widely felt across the industry,” CEO Laxman Narasimhan said. “In the U.S., severe weather impacted our U.S. and corporate results by nearly 3% during the quarter.The remaining challenges were due to reduced visits from our frequent customers. ”
Starbucks’ global same-store sales fell 4% in the second quarter. (David Paul Morris/Bloomberg/File/Getty Images)
McDonald’s, known for menu items like the Quarter Pounder and Big Mac, announced comparable sales rose 1.9% in the first quarter. In contrast, in the last quarter he increased by 3.4%, and in the first quarter of 2023 he increased by 12.6%.
“It’s clear that widespread consumer pressure continues around the world,” McDonald’s CEO Chris Kempczinski said.
McDonald’s announced that comparable sales increased 1.9% in the first quarter. (Brandon Bell/File/Getty Images)
“Consumers tend to become more discriminatory with every dollar they spend. [face] “Rising prices in everyday spending are weighing on the QSR industry,” he said, adding that “industry traffic in the first quarter was flat to declining in the U.S., Australia, Canada, Germany, Japan, and other countries. That’s worth noting.” Industry traffic is slowing in the UK and almost every major market. ”
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There are many quick service restaurants such as McDonald’s, Yum! The brand and Starbucks have emphasized value and deals in the current economy, where some consumers have prioritized eating at home more to save money.
Meanwhile, other companies in the industry experienced comparable sales increases in their most recently reported quarters. Chipotle and Restaurant Brands International were among them.
Hmm! The brands Starbucks and McDonald’s each have a large global presence, each with tens of thousands of stores around the world.
