Already a subscriber? Make sure to log into your account before viewing this content. You can access your account by hitting the “login” button on the top right corner. Still unable to see the content after signing in? Make sure your card on file is up-to-date.
McDonald’s has announced its first global sales drop in more than three years, blaming ongoing inflation and shifting consumer habits as the primary factors behind the decline.
What’s the deal: During a phone call with investors, McDonald’s CEO Chris Kempczinski reported that the company saw its first global sales drop in over three years during the April-June quarter of 2024, with a 1% decrease in overall sales. The company blamed ongoing inflation, which prompted lower-income consumers to opt for more budget-friendly home dining alternatives, thereby reducing their visits to McDonald’s. Additionally, international markets, especially in China and the Middle East, experienced a more significant drop of 1.3% because of weakened consumer sentiment and regional boycotts related to geopolitical tensions.
What the CEO is saying: Kempczinski said, “At the end of the day, we expect customers will continue to feel the pinch of the economy and a higher cost of living for at least the next several quarters in this very competitive landscape. So we believe it is critical for us to consider these factors in order to grow market share, and return to sustainable guest count-led growth for the brand.”
What they’re doing to turn it around: McDonald’s is taking various steps to attract back customers who think their prices are too expensive. One initiative, bringing back the $5 meal deal, has surpassed sales expectations and will be extended at most US locations beyond August.
Some charts for you:
