Fast food chains, including McDonald's, Domino's Pizza and Taco Bell, have introduced cheaper meal kits to compensate for the decline in traffic in US restaurants. McDonald's has maintained its $5 meal deal for more than a year, is emphasizing menu innovation and has stepped up marketing efforts to revive demand among low-income people.
McDonald's executives have highlighted the high prices of basic goods such as rent, food and child care that burden low-income consumers. “As long as this group of consumers continues to feel pressure on real incomes, I don't expect any significant changes on this front,” CEO Chris Kempczinski said during a conference call after the earnings announcement.
Emarketer analyst Zak Stambor said: “The (promotional) efforts appear to be paying off as (McDonald's) encouraged budget-conscious customers to spend at a time when higher-priced chains like Chipotle and Cava are seeing consumers withdraw.”
PIzza Hut felt the change in customer behavior caused by the rising cost of living. Sales of the chain have slowed down so much that owner, Yum! Brands, is considering selling it. Other brands owned by Yum! Brands such as Taco Bell and KFC are doing relatively better in a difficult market.
See also: Pizza Hut is in trouble. The owner wants to sell the chain
McDonald's results
McDonald's global same-unit sales rose 3.6% in the quarter ended Sept. 30, slightly above analysts' average forecast.
Comparable sales in the United States, McDonald's largest market, rose 2.4%, compared with growth of 0.3%. a year earlier.
Sales in the business segment, in which restaurants are run by local partners, increased by 4.7%. , mainly in Japan, while sales in international markets increased by 4.3%. , powered by Germany and Australia.
See also: McDonald's recruited using a chatbot. Millions of data leaked
Source: Reuters
