McDonald’s has reported a surprise drop in sales worldwide, its first decline in 13 quarters, as deal-seeking consumers shy away from higher-priced menu items including Big Macs, Reuters reports.
Persistent inflation has forced lower-income consumers to shift to more affordable food options at home. That has prompted fast food chains such as McDonald’s, Burger King, Wendy’s and Taco Bell to lean on value meals to spark customer traffic.
CEO Chris Kempczinski said there is a lot more deal-thinking from consumers who have become “very discriminating”. “Consumer sentiment in most of our major markets remains low,” he said.
Global comparable sales fell one per cent in the second quarter, compared with the analysts’ average estimate of a 0.5pc increase. Overall revenue rose 1pc.
McDonald’s launched a $5 meal deal in June at most of its US locations. It was set to extend that offer into August to lure back customers who have cut back on frequent restaurant trips.
McDonald’s results dovetail with comments last week from Coca-Cola CEO James Quincey, who said there had been “some softness in away-from-home channels” in North America, an indication of fewer people eating out.
Still, McDonald’s kept its 2024 operating margin forecast unchanged in the mid-to-high 40pc range. Its shares, which are down 15pc this year, were trading flat at $251.20.