McDonald’s worldwide sales took a hit, falling for the first time in nearly four years in the second quarter of 2024 as consumers became more discerning with their spending.
Inflation-weary consumers may have skipped eating out or chosen cheaper options as stores open for at least a year saw sales fall by 1% over the April-June period, compared to a year earlier.
It is the first time McDonald’s reported a decline in same-store sales globally since 2020, the BBC reported, when the COVID-19 pandemic forced companies to close their doors and millions stayed home. Research showed that the chain has increased prices by 141.4 percent across various popular items in the past five years, Newsweek previously reported.
The decline in sales comes despite restaurants offering deals in an attempt to win back cost-conscious customers and those who have boycotted the chain over its perceived stance on the Israel-Hamas war.
Sales at locations open at least a year fell 1 percent in the April-June period. The company said it expects same-store sales to be down for the next few quarters and is planning to launch more meal deals and new affordable menu items.
CEO Chris Kempczinski said on Monday during a conference call with investors that the results had forced the company into a “comprehensive rethink” of pricing, the BBC reported.
“Consumers still recognize us as the value leader versus our key competitors, it’s clear that our value leadership gap has recently shrunk,” Kempczinski said.
“We are working to fix that with pace,” he added.
McDonald’s has faced backlash from consumers over recent price increases, but Kempczinski defended the higher menu prices and said the cost of paper, food, and labor increased by as much as 40 percent in some markets over the last few years.
“Trying to move the consumer with one item or a few items is not sufficient for the context that we’re in,” he said.
Kempczinski argued that the average price of a Big Mac in the U.S., now $5.29, was up 21% since 2019, roughly in line with the pace of inflation, and many items had risen by less.
New menu items are also in the works as the company is testing its value-oriented Big Arch double burger.
McDonald’s shares rose 4% in morning trading Monday despite the setback.
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
