McDonald’s is making plans to combat slowing sales by stepping up on deals and value messaging, with the burger giant reporting that customers are eating out less due to inflation concerns in major markets. Same-store sales rose 1.9% worldwide in the first quarter, slightly below Wall Street’s forecast. CEO Chris Kempczinski acknowledged that all income groups are seeking value, not just lower-income consumers, and highlighted the need for a nationwide value message and marketing to support it. McDonald’s saw a 2.5% increase in same-store sales in the U.S. in the first quarter, mostly due to price hikes carried over from last year.
Despite the overall increase in same-store sales in the U.S., McDonald’s is still facing challenges in some areas where it is losing out to competitors on customer perception of value and affordability. Kempczinski noted that Wendy’s is currently offering free fries with the purchase of a medium burger. The company is focused on enhancing its nationwide value message to stay competitive in the market. Internationally, McDonald’s experienced a decline in same-store sales in certain markets like the Middle East and Muslim-majority countries due to boycotts related to its perceived support of Israel. The company is expecting these boycotts to continue until the war is over.
McDonald’s reported a 5% increase in revenue to $6.17 billion in the January-March period, in line with Wall Street estimates. Net income was up 7% to $1.93 billion, with adjusted earnings at $2.70 per share, slightly below analysts’ forecast. The company is actively working on implementing value-driven strategies to drive sales and compete effectively in the market. McDonald’s shares remained flat in morning trading following the news.
Overall, McDonald’s is facing challenges in various markets due to changing consumer behaviors influenced by inflation concerns and perception of value. The company is focused on enhancing its value message and marketing efforts to effectively compete with rivals offering similar deals. While same-store sales increased in the U.S., international markets experienced a decline due to boycotts related to political issues. McDonald’s is committed to overcoming these challenges by adapting its strategies to meet customer demands and expectations in the evolving market landscape.
