McDonald's Sales Fall Worldwide for First Time Since 2020

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Facts

  • McDonald's global sales have reportedly declined for the first time in four years amid rising prices and the changing eating habits of consumers.[1]
  • On Monday, the fast-food giant reported a 1% year-on-year fall in sales from April to June, with total revenue flat at $6.49B and net profit falling 12% to $2.02B.[2]
  • Amid what the fast food giant's Chief Executive Officer, Chris Kempczinski, characterized as 'very discriminating' consumer spending, a steeper decline of 1.3% in McDonald's sales was reported in its international developmental licensed markets.[3]
  • Despite the losses, McDonald's maintains its operating margin in the mid-to-high 40% range and its capital expenditure budget at up to $2.7B.[4]
  • The chain plans to extend to August a $5 meal deal introduced in June and to be more selective with price increases to protect profitability.[5]
  • This comes after McDonald's warned that the Israel-Hamas war in Gaza had impacted its business in some Middle Eastern countries, Indonesia, and Malaysia.[2]

Sources: [1]Guardian, [2]Ft, [3]Al Jazeera, [4]Reuters and [5]Independent.

Narratives

  • Narrative A, as provided by Yahoo Finance. McDonald's '$5 meal deal' failed to attract enough customers and is partly the reason behind its sales decline over the past three years. Despite being designed to counteract higher grocery prices, it cannibalized sales from higher-priced menu items, contributing to the overall drop in revenue.
  • Narrative B, as provided by Bloomberg. McDonald's global sales drop can be countered with a plan that is already in the process of implementation. Its $5 meal deal in the US has exceeded sales expectations. This can be part of a broader strategy to maintain affordability and attract more customers.

Predictions