Americans are turning their backs on fast food as some of the country’s largest franchises continue to hike the prices of what were once affordable meals.
Explaining its first quarterly sales miss in almost four years, the CEO of McDonald’s told investors this week that consumers on less than $45,000 a year were spending less at their restaurants.
‘Eating at home has become more affordable,’ said boss Chris Kempczinski. ‘The battleground is certainly with that low-income consumer.’
‘I think what you’re going to see as you head into 2024 is probably more attention to what I would describe as affordability,’ he added.
Bret Kenwell, investment analyst at eToro, told DailyMail.com: ‘During the conference calls, management teams are acknowledging the monetary pressures that certain consumer groups are feeling.’
Americans are turning their backs on fast food as some of the country’s largest franchises continue to hike the prices of what were once affordable meals
The CEO of McDonald’s, Chris Kempczinski, said that in 2024 it would focus more on affordability to ensure it could appeal to lower-income families
It comes as videos showing shockingly high fast food prices have gone viral across social media, cementing the idea that the days of $1 value menus are long gone.
McDonald’s was recently lambasted throughout the internet after one of its rest stop restaurants in Connecticut was outed for selling a Big Mac meal for $17.59.
Then a photo of a receipt from another McDonald’s in Connecticut went viral on X because it was charging $7.39 for just one Egg McMuffin.
Last quarter McDonald’s sales were up only 3.4 percent on the same quarter in 2022, well below Wall Street expectations of 4.7 percent.
The problem is not exclusive to McDonald’s. This week, Yum Brands, the parent of KFC, Pizza Hut and Taco Bell, reported similarly disappointing results.
Last month, a viral video showed somebody discovering a 12-year-old Taco Bell receipt that showed Americans could once buy two of the chain’s beefy five-layer burritos for $2.59. In most restaurants, they are now more than twice the price.
Taco Bell is the Yum group’s main earner in the US and has been known historically for its value offerings. Its sales grew just 3 percent last quarter, which is well below the 11 percent growth it saw the year prior.
Pizza Hut sales were down 4 percent and KFC sales were flat.
Laura Murphy, managing director of PR firm Bolt, which specializes in food and beverage marketing, told NBC News that people simply want cheap food.
A photo of a receipt issued by a McDonald’s at a rest stop in Connecticut that charged $7.39 for an Egg McMuffin
‘People are really telling fast food industry leaders, “This is what we’re looking for, this is what we want. We want efficiency. We want affordability,”‘ she said.
‘Let’s go back to really making sure that we’re providing simple food in an affordable way that’s efficient, quick, and gives people really the basics of what they’re looking for.’
As suggested by Kempczinski, consumers’ dwindling appetite for fast food is coinciding with the increasing affordability of groceries.
The cost of food at home as reported by the Bureau of Labor Statistics was up only 1.3 percent between December 2022 and December 2023. Meanwhile, the cost of food away from home had increased 5.2 percent over the same period.
‘There’s been a steady increase in prices for food “away from home,” both over the last few months and over the past year,’ said Kenwell.