The traffic at the McDonald’s store fell further than expected in the first quarter economic uncertainty weighed on the guests.
The problem was particularly acute in the United States, where sales with comparable stores – or sales in open places at least a year – dropped by 3.6%. It was the biggest American decline that McDonald’s has seen since 2020 when a pandemic has closed shops and restaurants and other public spaces nationally.
McDonald’s President Chris Kempczinski, said that consumers with lower and average income, worried about inflation and economic prospects, reduced fast food during January-March.
Traffic across the consumer industry earning $ 45,000 per year or less was decreasing by two-digit percentages, he said, and traffic in intermediate income consumers was almost as much. Only the traffic of those who earn $ 100,000 or more have remained solid, he said.
“We believe that McDonald’s can better resist these difficult conditions than most,” Kempczinski said on Thursday at a conference call with investors. “However, we are not immune to the volatility of the industry or the pressures that our consumers are confronted.”
McDonald’s rivals reported similar slowdowns. Yum Brands, which has the Taco Bell, KFC, Habit Burger & Grill and Pizza Hut brands, said on Wednesday that its sales with unique American stores had dropped by 2% in the first quarter. Chipotle Also reported sales of weaker than planned in the first quarter.
McDonald’s comparable store sales fell 1% worldwide in the first quarter, while traffic growth in Japan, China and the Middle East failed to overcome market weakness such as the United Kingdom without the impact of the day of the additional year in 2024, sales with comparable stores were stable, said the company. Wall Street expected an increase of almost 2%, according to analysts interviewed by FostSet.
The channel based in Chicago responded by introducing a McValue US menu, which allows customers to buy an item for $ 1 when they buy a full price. He also announced Thursday that his $ 5 meal case will pass the rest of this year. This agreement was introduced last June and extended several times.
KEMPCZINSKI said that the $ 5 meal agreement resonates well with consumers, but the McValue menu does not stimulate the additional sales that the company expected, so that McDonald’s can make changes.
Kempczinski said McDonald’s expected the first quarter to be the weakest this year. Already, things improve.
In April, an McDonald’s meal linked to “a film Minecraft”, which was offered in 100 countries, sold from its collection figures in less than two weeks. New chicken strips and the American return of the snack envelope – exercised later this year – should also generate traffic, said Kempczinski.
McDonald’s reaffirmed its financial objectives for the whole year despite the impact of prices. And Kempczinski said that internal McDonald’s surveys show that anti-American feeling, especially in Canada and Northern Europe, does not seem to have an impact on what consumers think of the McDonald’s brand.
McDonald’s actions dropped by 1% in the morning trade Thursday.
The turnover of the first quarter of McDonald’s dropped 3% to $ 5.95 billion, in less forecasts of analysts of $ 6.09 billion, according to Factst.
Net profit dropped 3% to $ 1.86 billion. Adjusted for restructuring costs and other occasional items, the company won $ 2.67 per share, beating Wall Street projections with a penny.
