NATIONAL NEWS

McDonald’s same-store sales fall for 1st time since 2020 as tapped-out customers hold on to cash

Jul 29, 2024, 10:12 AM

FILE: The McDonald's logo is displayed at a McDonald's restaurant on July 22, 2024 in Burbank, Cali...

FILE: The McDonald's logo is displayed at a McDonald's restaurant on July 22, 2024 in Burbank, California. McDonald’s is extending its $5 meal deal in most U.S. restaurants past its initial four-week offering with the fast-food icon saying the offer has driven customers back to its restaurants. (Photo by Mario Tama/Getty Images)

(Photo by Mario Tama/Getty Images)

They’re not lovin’ it.

McDonald’s global same-stores fell for the first time in nearly four years in the second quarter as inflation-weary consumers skipped meals out or chose cheaper options. The company said it’s working on fixes, like meal deals and new menu items, but it expects same-store sales to be down for the next few quarters.

“Consumers still recognize us as the value leader versus our key competitors, it’s clear that our value leadership gap has recently shrunk,” McDonald’s Chairman, President and CEO Chris Kempczinski said Monday during a conference call with investors. “We are working to fix that with pace.”

Sales at locations open at least a year fell 1% in the April-June period, the first decline since the final quarter of 2020 when the pandemic shuttered stores and millions stayed home.

In the U.S., same-store sales fell nearly 1%. McDonald’s saw fewer customers but it said those who came spent more because of price increases. Kempczinski defended those increases, saying McDonald’s costs for paper, food and labor have increased as much as 40% in some markets over the last few years.

The company also reported lower store traffic in France and the Middle East, where people have been boycotting McDonald’s because of a perception that it supports Israel in the war in Gaza. Kempczinski said weak consumer sentiment in China has customers fleeing to lower-priced rivals.

McDonald’s warned in April that more of its inflation-weary customers were seeking better value and affordability. The Chicago burger giant introduced a $5 meal deal at U.S. restaurants on June 25, which was late in this financial reporting period.

McDonald’s U.S. President Joe Erlinger said Monday that $5 meal deal sales are running ahead of expectations and are getting lower-income consumers back into McDonald’s stores. Erlinger said 93% of McDonald’s franchisees have agreed to run the promotion through August.

Other countries like Germany and the United Kingdom are also seeing success with meal deals, the company said. But Kempczinski said McDonald’s needs to be providing broader value and boosting that message with better marketing.

“Trying to move the consumer with one item or a few items is not sufficient for the context that we’re in,” he said.

New menu items are also in the works. The company is testing its value-oriented Big Arch double burger in three international markets through the end of this year, Kempczinski said.

For the second quarter, revenue was flat at $6.5 billion and just off the $6.6 billion that Wall Street was expecting, according to analysts polled by FactSet.

The company’s net income fell 12% to $2 billion, or $2.80 per share. Excluding one-time items such as restructuring charges, McDonald’s earned $2.97 per share. That was far from the per-share profit of $3.07 that industry analysts had forecast.

Investors appeared satisfied with McDonald’s plans to reverse its slide. McDonald’s shares rose 3.5% in morning trading Monday.

KSL 5 TV Live

National News

Photo shows wreckage of Alaska plane crash....

Karina Tsui, CNN

All 10 victims of the fatal Alaska plane crash have been recovered, officials say

All 10 victims of the fatal Alaska plane crash off the coast of western Alaska have been recovered, authorities said Saturday.

13 hours ago

An aerial overall exterior general view of Caesars Superdome, Sunday, Dec. 15, 2024, in New Orleans...

Associated Press

Super Bowl 2025: Time, channel, halftime show, how to watch Chiefs vs. Eagles livestream

Super Bowl weekend has arrived. The Kansas City Chiefs will go for a historic three-peat in the NFL's title game on Sunday in New Orleans, while the Philadelphia Eagles are the only remaining team that can stop them.

15 hours ago

FILE -  Chicago Bears coach Dick Jauron calls out to his team while observing offensive drills in m...

Dave Skretta, AP Sports Writer

Longtime NFL player and coach Dick Jauron dies at 74

Longtime NFL player and coach Dick Jauron, who led the Chicago Bears to the playoffs and was voted AP coach of the year in 2001, died Saturday. He was 74.

17 hours ago

U.S. President Donald Trump, left, and Canadian Prime Minister Justin Trudeau talk prior to a NATO ...

Jim Morris, Associated Press

Justin Trudeau reportedly says Trump’s talk of making Canada a US state is ‘a real thing’

Prime Minister Justin Trudeau says President Donald Trump’s talk of making Canada the 51st state is “a real thing” and is linked to the country’s rich natural resources.

1 day ago

Republican presidential nominee former President Donald Trump, left, claps as Tesla and SpaceX CEO ...

Anthony Izaguirre associated press

19 states sue to stop DOGE from accessing Americans’ personal data

Nineteen Democratic attorneys general have sued President Donald Trump to stop Elon Musk’s DOGE from accessing Treasury Department records.

1 day ago

This photo provided by the U.S. Coast Guard on Friday, Feb. 7, 2025, shows a small commuter plane t...

Becky Bohrer and Hallie Golden, Associated Press

Missing commuter plane found crashed on Alaska sea ice and all 10 aboard died, authorities say

A small commuter plane that crashed in western Alaska on its way to the hub community of Nome was located Friday on sea ice, and all 10 people on board died, authorities said.

2 days ago

Sponsored Articles

holiday gift basket with blue tissue paper and gingerbread cookies...

Kneaders Bakery & Cafe

Holiday hacks for a stress-free season

Get more out of your time with family and loved ones over the holidays by following these tips for a stress-free season.

2 computer techs in a computer shop holding up a computer server with the "hang loose" sign...

PC Laptops

A comprehensive guide to choosing the right computer

With these tips, choosing the right computer that fits your needs and your budget will be easier than ever.

crowds of people in a German style Christmas market...

This Is The Place Heritage Park

Celebrate Christkindlmarket at This Is The Place Heritage Park!

The Christkindlmarket is an annual holiday celebration influenced by German traditions and generous giving.

Image of pretty woman walking in snowy mountains. Portrait of female wearing warm winter earmuff, r...

Lighting Design

Brighten your mood this winter with these lighting tricks

Read our lighting tips on how to brighten your mood in the winter if you are experiencing seasonal affective disorder.

A kitchen with a washer and dryer and a refrigerator...

Appliance Man

Appliance Man: a trusted name in Utah’s home appliance industry

Despite many recent closures of local appliance stores, Appliance Man remains Utah's trusted home appliance business and is here to stay.

abstract vector digital social network technology background...

Les Olson

Protecting yourself against social engineering attacks

Learn more about the common types of social engineering to protect your online or offline assets from an attack.

McDonald’s same-store sales fall for 1st time since 2020 as tapped-out customers hold on to cash