McDonald’s checking its prices after first sales drop since 2020

Fast-food behemoth McDonald’s is rethinking the prices on its menu amid its first drop in global sales since 2020, CEO Chris Kempczinski indicated on the company’s second-quarter earnings call Monday.

Global comparable sales for McDonald’s dropped by 1%, with U.S. revenue falling 0.7%, per a report from the company regarding its fiscal  2024 second quarter. The U.S. sales results were “were driven by negative comparable guest counts, partly offset by average check growth due to strategic menu price increases,” the report said.

It was the first sales drop the company has incurred since the fourth quarter of fiscal 2020, according to Bloomberg.

Economic factors like inflation initially drove price increases, which contributed to the changes in consumer behavior.

“Over the last several years, our system has sustained significant inflationary cost increases ranging from 20% to 40%, depending on the market. … We look for ways to protect restaurant profitability via productivity efforts and selective price increases. These price increases disrupted long-running value programs and led consumers to reconsider their buying habits. … In other markets like the U.S. … a more comprehensive rethink has been required,” Mr. Kempczinski said.

McDonald’s has already begun changes meant to address consumer concerns, including a $5 meal that launched just before the end of the second quarter, according to CNBC.

The deal includes a McChicken sandwich or McDouble burger, a small drink, small fries and four Chicken McNuggets.

The deal was first introduced in upstate New York, and 93% of the company’s franchisees are committed to expanding its lifespan into the summer.

The average check during the deal’s run has been around $10, Mr. Kempczinski noted.