OAN Staff James Meyers
1:30 PM – Monday, July 29, 2024
Fast food giant McDonald’s reported its first sales decline on Monday since the COVID-19 pandemic as the chain eatery struggles to draw in customers due to its “inflated menu prices,” as some complaining customers have voiced.
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McDonald’s recently put out a $5 value meal in June in order to garner more customers. They also said that its same-store sales in the U.S. fell by 0.7% in the second quarter as revenues remained flat.
In 2023, U.S.-based same-store sales rose 10.3%, and sales in international markets dropped 1.1%, compared with estimates of a 1.69% growth.
However, McDonald’s reported revenues of $6.5 billion, which is up 2% year over year but still short of analyst estimates of $6.63 billion.
It seems as though customers globally have cut back on fast food as prices have continued to rise, according to McDonald’s CEO Chris Kempczinski, who told investors on the earnings call on Monday that consumers were “more discriminating with their spend.”
Additionally, Coca-Cola CEO James Quincey said there had been “some softness in away-from-home channels” in North America, an indication of less people eating out.
“The biggest hit for McDonald’s is the low-income consumer has really cut back on visits and that is more than offsetting the typical trade down McDonalds normally sees in tougher economic times,” said Edward Jones analyst Brian Yarbrough.
Furthermore, companies like McDonald’s and Starbucks have also suffered from boycotts related to the Israel-Hamas war, which affected sales in the Middle East markets.
The Chicago-based fast food chain earned $2.97 per share on an adjusted basis in the second quarter, failing to meet expectations of $3.07.
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