The CEO of McDonald's acknowledged a drop in sales due to increased menu prices. Customers have noticed and criticized the price hikes, especially the nearly $18 Big Mac combo. The company aims to focus on affordability in response.
Chris Kempczinski discussed this strategy on an earnings call, highlighting a shift towards making their offerings more affordable in 2024. Despite a 3.4% growth in global same-store sales, it fell short of the expected 4.7%. Rising inflation has particularly affected low-income customers, leading to a decrease in patronage.
Kempczinski pointed out that eating at home is becoming more cost-effective. The company plans to slow down price increases, according to restaurant analyst Mark Kalinowski.
"Eating at home has become more affordable," Kempczinski said. "The battleground is certainly with that low-income consumer."
A McDonald's in Connecticut faced backlash for charging $7.29 for an Egg McMuffin and $5.69 for hash browns. The same location priced a Big Mac combo at $17.59, drawing significant criticism.
$18 for a big Mac?♬ original sound - Patrick Bet-David
Fast food prices may rise further due to minimum wage increases. In California, fast food workers' wages will hit $20 per hour starting April 1. Both McDonald's and Chipotle anticipate needing to raise prices to cover these higher labor costs.