McDonald’s Posts Disappointing Results As Customers Cut Back Spending

The fast-food chain saw sales growth in its restaurants that opened more than a year ago reach a disappointing 1.9% rather than the 2.33% that had been widely predicted. This figure was 12.6% in Q1 2023.

MCD suffered with all its geographic regions failing to meet expectations, though some good reasons were given for this. For example, the war in the Middle East has hit the company hard in the form of boycotts. The company said that revenue will remain weak while the war continued.

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Chris Kempczinski, LinkedIn

The American market is crucial for MCD, with executives worried that low-income customers in the US are cutting back on their spending. This is a significant part of its customer base, and reports suggest that McDonald’s is planning to introduce a nationwide value menu similar to those available in some other countries.

CEO Chris Kempczinski said:

Consumers continue to be even more discriminating with every dollar that they spend as they faced elevated prices in their day-to-day spending.

He pointed out that this is putting added pressure on the fast-food industry. The UK, Australia, Canada, and Japan are some of the countries where business has been slower than normal.

MCD posted revenue for Q1 of $6.17bn, a 4% year-over-year increase and a little above the average estimated made by Wall Street analysts. Adjusted earnings rose by 2% to $2.70, which was slightly below the $2.72 that was expected.