McDonald’s (MCD) has posted its first fall in sales numbers since 2020. This has come following the fast-food giant’s recent price increases and inflation concerns among consumers.
McDonald’s Suffers Falling Sales Numbers
A global drop in sales of 1% was recorded in the second quarter of 2024 compared to 2023’s numbers. Analysts had expected a 0.5% increase. Revenue grew by 1% overall in the quarter. Net profit dropped to $2.02bn, which is a fall of 12%. Meanwhile, its earnings per share declined by 6% to $2.97.
Chief executive Chris Kempczinski pointed out that customers have become more discriminating when looking for deals and that “consumer sentiment in most of our major markets remains low”. However, he stated that the company will continue to focus its attention on key growth drivers, including loyalty and chicken.
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High rates of inflation mean that consumers are now having to choose wisely when it comes to items like fast food. Adding to the difficulties, McDonald’s price rises mean that it’s no longer widely seen as the highly affordable option that it was a few years ago.
MCD has started to use discounts to attract more customers, with meal deals to make their products more attractive to deal-seekers looking for value in their fast-food options. Despite this, the share price has suffered a fall of more than 15% in the year to date.
On the positive side of this news, the unchanged profit margin predictions suggest that the brand should be strong enough to pull through the current inflation-driven crisis.
