McDonald’s is the leader of the fast-food world.
It suffered a major quarterly loss in 2020 when everything was locked down due to the pandemic.
But investors were shocked over the reason McDonald’s suffered its first quarterly drop in sales since the pandemic.
YOU CAN’T AFFORD A BREAK TODAY
Thanks to the Biden-Harris and the tax-and-spend Congressional Democrats, Kamalaflation is running rampant.
To make matters worse, some states have increased the minimum wage, which hits low end restaurants harder than most since they have smaller profit margins.
More people in the U.S. worked at McDonald’s for their first job than any other company.
Almost all of them started off earning minimum wage until they got really good at their jobs.
With increased food and labor costs, prices at low margin restaurants are skyrocketing and hurting sales.
$20 BIG MAC MEALS
Big Mac meals have gone up nationwide by 27% since 2019.
One Connecticut McDonald’s restaurant was reportedly charging close to $20 for a meal.
CNN reported that “Joe Erlinger, president of McDonald’s USA, said $18 for a Big Mac combo was the ‘exception’ and not the norm across all 13,700 restaurants in the country.”
Sales at McDonald’s have dropped from April to June as the economy continues to soften.
The number of customers dropped, but the amount of money stayed about the same because of price increases.
According to the Daily Mail, “the biggest hit for McDonald’s is the low-income consumer has really cut back on visits and that is more than offsetting the typical trade down [the chain] normally sees in tougher economic times, said Edward Jones analyst Brian Yarbrough.”
SLOW ECONOMY SLOW SALES
The slowing economy makes eating out less of an option for many people.
But people are inflation weary and are looking for better bargains.
Slightly higher end restaurants, which can make more money on alcohol sales, sometimes have better prices on burgers than fast-food restaurants.
McDonald’s is responding by creating more value options, such as $5 value meals.
The hope is people will shell out $5 for a McDouble or a four-piece McNuggets or a McChicken with fries and a drink.
This was rolled out in April and has been popular.
McDonald’s expects to keep this menu item through the summer.
Politics is also making a dent in sales.
There is a perception in the Middle East, China, and France that McDonald’s is on Israel’s side in the Gaza conflict and is being boycotted.
Burger King and Wendy’s are also experiencing a drop in sales and have introduced their own value meals.
These changes are hurting people who own McDonald’s stock, which is down 15%.
Revenue was lower than expectations as well.
McDonald’s still managed to earn $6.5 billion, which is a bit below the expected earnings of $6.6 billion.
Patriot Political will keep you up-to-date on any developments to this ongoing story.
