Source: KTLA 5 YouTube
The CEO of McDonald’s is speaking out this week to admit that the brand’s sales have taken a hit as jacked-up menu prices have turned off core customers.
McDonald’s CEO Speaks Out
The New York Post reported that global same-store sales form McDonald’s in the latest quarter had grown just 3.4%, falling short of the 4.7% growth that had been expected.
“I think what you’re going to see as you head into 2024 is probably more attention to what I would describe as affordability,” said McDonald’s chief executive Chris Kempczinski, adding that low income customers making less than $45,000 per year have largely stopped ordering from McDonald’s.
“Eating at home has become more affordable,” Kempczinski explained. “The battleground is certainly with that low-income consumer.”
McDonald’s Wants To Win Customers Back
McDonald’s is now hoping to get customers back with marketing that emphasizes low-cost options.
“We certainly know consumers are more wary — and weary — of pricing and we’re going to continue to be consumer-led in our pricing decisions as we look forward to 2024,” said Chief Financial Officer Ian Borden.
Restaurant analyst Mark Kalinowski is warning that despite the backlash, the price hacks at McDonald’s will likely continue, albeit at a slower pace of 2% to 3% versus last year’s 10%.
“App discounts will be a big part of their arsenal,” Kalinowski said.
ABC News reported that after Kempczinski’s comments, McDonald’s shares tumbled nearly 4% on the New York Stock Exchange by closing.
Related: McDonald’s Worker Gets Nasty Dose Of Karma After Spitting On Bun Before Serving It To Cop
McDonald’s Israel Controversy
Back in October, customers in the Middle East were angered after McDonald’s Israel announced that it was providing free meals to Israeli soldiers. Some franchises like McDonald’s Oman fired back by announcing donations to relief efforts in Gaza. In the months since then, sales have dropped in Muslim-majority countries like Malaysia and Indonesia as well as in countries that have large Muslim populations like France.
“So long as this conflict, this war, is going on… we’re not expecting to see any significant improvement in this,” Kempczinski said, according to Yahoo News. “It’s a human tragedy, what’s going on, and I think that does weigh on brands like ours.”
Kempczinski said back in October that “several markets in the Middle East and some outside the region are experiencing a meaningful business impact due to the war and associated misinformation that is affecting brands like McDonald’s.”
“This is disheartening and ill-founded,” Kempczinski said, according to Fox Business. “In every country where we operate, including in Muslim countries, McDonald’s is proudly represented by local owner operators who work tirelessly to serve and support their communities while employing thousands of their fellow citizens. That local community connection is the genius of the McDonald’s system.”
Backstory: McDonald’s Facing Potential Boycott For Giving Free Food To Israeli Soldiers – Lebanon Restaurant ‘Destroyed’
Kempczinski went on to say that McDonald’s stands in “solidarity with communities around the world, living our purpose and values to the fullest through difficult times.”
“Our hearts remain with the communities and families impacted by the war in the Middle East,” he added. “We abhor violence of any kind and firmly stand against hate speech, and we will always proudly open our doors to everyone. And whether the earthquake in Japan, or the tragedies that struck Morocco and Hawaii last year, our system is always there to support.”
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