McDonald's to 'rethink' prices after sales fall

alkhabrfdakika
29 Jul, 2024

 

McDonald's is reviewing its pricing strategy after consumers have recouped spending on bulk food  sales. Sales at  companies open  at least a year fell 1% in the April-June period from a year ago - the first  decline since the disaster.  The drop came in spite of the burger chain that pays the store trying to win back valuable sales and those boycotting the chain from the war in Israel and Gaza.  CEO Chris Kempczinski says the poor results are causing the company to "completely reconsider" the price.   told investors that the company is relying on price cuts to try to stop the sales decline.  executives pointed to recent promotions such as  $5 happy meals in the US and a campaign in the UK where diners can choose three items for £3. . It is expected that these  will increase in the coming months, and the company said that it is working with the commercial company on other "profitable" plans.  The company's business rose more than 3% after the update, according to Mr. Kempczinski said McDonald's has the balance sheet to make the plan work.  "We know how to do this. We have written the price and  are working with our partners to make the necessary changes," he said.  McDonald's is facing  backlash from customers after raising prices significantly during the pandemic.  Last month, the  US service chief issued a formal response to consumer complaints in an open letter, saying social media was painting the wrong picture.  He said that the average price of a Big Mac in the US,  now $5.29 (£4.11), has risen by 21% since 2019 - according to the price - and many products have gone up.


But in a call to investors, Mr. Kempczinski acknowledged that the company still has work to do to regain its valuable reputation. Price increases in response to inflation "caused consumers to reassess their buying habits", agreed Kempczinski. While some markets can adapt, others "require a lot of rethinking," he said. Bank of America analyst Sara Senatore said McDonald's raised prices and points faster than its peers. "Smart customers, they know that," he said. "The $5 meal they started might start to change that perception, but we still haven't seen the change in business that they should see." McDonald's is the latest company to warn about consumer spending, including in major economies like China. According to the company, gross sales, including sales from open stores, remained consistent year-on-year. Profit fell by 12%. McDonald's said that low-income customers were hurt the most, and that the loss of those customers was not due to reduced business for wealthy families. Demand for hotels in the United States has fallen, the company said, while weakness in France and a price war in China are also weighing on sales. France is among the countries that carry this label and has removed the call from Israel's war in Gaza. Other American companies, including Starbucks, are also involved. "Customers care a lot about where, when and what they eat, I would say that we do not expect any significant changes in the environment in the next few quarters," McDonald's The CEO said on the call.
alkhabrfdakika

alkhabrfdakika

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