McDonald’s wants to win back low-income consumers, Laura Bratton @ QUARTZ US customers making less than ,000 stayed away in 2023. That could continue this year, executive says . . . McDonald’s chief financial officer Ian Borden told investors Monday (Feb. 5) that he’s looking for ways to win back the low-income customers the company lost last year. US consumers whose incomes fall below ,000 are really important to the fast food chain, even though they make less than the average McDonald’s customer. Their significance was especially felt in the third quarter of 2023, when they stayed away from McDonald’s restaurants after the company hiked prices. Low-income customers furthered their distance even more at the end of 2023, Borden
Topics:
Angry Bear considers the following as important: Hot Topics, McDonalds, US EConomics
This could be interesting, too:
NewDealdemocrat writes March JOLTS report: declines in everything, fortunately including layoffs
NewDealdemocrat writes Manufacturing treads water in April, while real construction spending turned down in March (UPDATE: and heavy truck sales weren’t so great either)
NewDealdemocrat writes Repeat home sale prices accelerated in February (but don’t fret yet)
Angry Bear writes Sorta a book review “Wall Street’s War on Workers”
McDonald’s wants to win back low-income consumers,
Laura Bratton @ QUARTZ
US customers making less than $45,000 stayed away in 2023. That could continue this year, executive says . . .
McDonald’s chief financial officer Ian Borden told investors Monday (Feb. 5) that he’s looking for ways to win back the low-income customers the company lost last year.
US consumers whose incomes fall below $45,000 are really important to the fast food chain, even though they make less than the average McDonald’s customer. Their significance was especially felt in the third quarter of 2023, when they stayed away from McDonald’s restaurants after the company hiked prices.
Low-income customers furthered their distance even more at the end of 2023, Borden told investors on a call.
The reason? Food inflation, he said.
What (low-income) McLovers want
Grocery prices have increased a lot less than the cost of eating out, so people who are conscious of their cash are more inclined to make meals at home. In December, inflation for food eaten at home (aka groceries) stood at just 1.3%, much lower than inflation for food away from home (5.2%).
“The battleground is certainly with that low-income consumer,” Borden said. Those customers will care even more about affordability in 2024, he noted, adding that the company is working “at the local level to make sure we continue to provide good value for [them].” No specifics were mentioned for upcoming US deals.
But Borden pointed to offerings like the “McMuffin and hot coffee pairing” in Canada, Saver Meals deals in the UK, and “30 Days, 30 Deals” in Australia as examples of recent efforts to capture lower-income international customers.
McDonald’s needs all the help it can get to fight headwinds
The chain, which had a rocky fourth quarter, expects sales to be impacted by inflation and Israel’s war in Gaza into 2024.
McDonald’s sales of $25.5 billion for the 2023 fiscal year fell about 0.2% short of Wall Street’s expectations Monday, according to analysts surveyed by FactSet. The company’s stock dropped more than 3% in morning trading after the news.