McDonald’s sales have dropped for the first since the pandemic, as customers avoid more costly Big Macs.
Fast food chain reports a 1pc drop in global sales for the three-month period ending June 30 – first decline since end 2020 when stores were shut during lockdown.
A Big Mac’s price has risen by 60pc from £2.99 in 2020 to £4.69 while a Happy Meal costs £3.59 now compared to £2.99 4 years ago.
McDonald’s CEO Chris Kempczinski said that consumers are “more discriminating” in their spending, as the cost-of-living crisis continues to affect household budgets.
McDonald’s warned previously that customers are seeking a better value for money and affordability in the face of rapidly increasing prices.
After years of steep price increases, the chain has launched a series of discounts to attract budget-conscious consumers.
The new $5 meal deal (£3.90), which was introduced in US restaurants last year, will now be extended to August.
The bosses also cited the success of the loyalty programme for the chain, which rewards regular customers with points that can be used to redeem future purchases.
Loyalty members contributed to nearly $7bn of digital sales in 50 markets in the last quarter, up from $6bn the previous three-month period.
McDonald’s reported total revenues of just over $6.5bn. This represents an increase of about 1pc, as the price increases offset declining sales.
Profits fell by 12pc, to $2bn. This was mainly due to costs associated with a major reorganization plan, which resulted in the layoff of hundreds of employees. If these costs are excluded, the operating profit dropped by 6pc.
McDonald’s reported weaker sales in France, China, and the Middle East.
Business has been affected by boycotts across the Middle East, amid allegations that the fast-food chain supports Israel’s war in Gaza.
After a sales slump, the company purchased back hundreds of franchise restaurants in Israel in April.
McDonald’s said that it had no position on the conflict and was not responsible for its franchisees’ actions, while Mr Kempczinski described the allegations as “misinformation”.
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