McDonald’s CEO Chris Kempczinski revealed that the fast-food giant experienced its first decline in global sales in over three years. The drop in sales was attributed to low-income consumers cutting back on eating out and finding ways to economize, leading to a 1 percent decrease in worldwide sales in the April-June period. Additionally, outlets in international developmental licensed markets saw a steeper decline in sales, particularly in China and the Middle East where weak consumer sentiment and boycotts impacted business.
Kempczinski highlighted that consumers have become more selective in their spending habits, with low-income consumers opting to eat at home and find other cost-saving measures. Despite still being recognized as the best-value fast-food chain, McDonald’s faced a narrowing “value leadership gap” with its competitors. To address this issue, the company launched a successful $5 meal deal in June and plans to extend the promotion at most US outlets beyond August.
While the recent sales results were lackluster, McDonald’s shares rose 4.5 percent on Monday morning as investors showed confidence in the company’s efforts to reignite growth and improve market share. Kempczinski emphasized the commitment to enhancing performance in all major markets, stating that it may not happen immediately, but progress will be made over time. This strategic approach resonated positively with investors, indicating optimism about McDonald’s future prospects.
