Cheeseburgers have become too expensive

By: Trademagazin Date: 2024. 07. 29. 11:08

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McDonald’s reported a drop in sales in the second quarter of 2024, the first time the fast-food chain has seen a decline in 13 quarters. According to the company’s CEO, inflation has had a significant impact on consumption patterns and more and more people are choosing to eat at home as it is more cost-effective for the middle class.

Challenges due to inflation and labor shortages

McDonald’s produced weaker results than Wall Street expected. Due to inflation, lower income consumers prefer to eat at home and avoid fast food restaurants. Global sales fell 1 percent in the second quarter, in contrast to analysts’ expectations for a 0.53 percent increase.

McDonald’s, Burger King and other fast-food chains tried to counter the decline by introducing more expensive but limited-time offers. McDonald’s introduced its $5 lunch offer in its US restaurants in June, but the revenues from this will not be visible until the third quarter.

The value-for-money food wars

Low-income consumers hit by inflation cut back on restaurant visits, which had a significant impact on McDonald’s sales. According to the company’s CEO, Chris Kempczinski, consumers are spending their money more and more consciously. Still, McDonald’s maintained its 2024 operating margin forecast in the mid-to-upper 40 percent range.