#McDonalds #Fallen #Short #Year
Fast food chains lamented slow restaurant traffic in the first half of the year. McDonald’s (MCD) executives said today that the matter has not gone away.
McDonald’s shares fell slightly recently after the company said third-quarter same-store sales were lower than Wall Street expected. In a conference call with analysts, CEO Chris Kempczinski said that “traffic remained compressed, reflecting industry-wide challenges.”
“While we expected a challenging environment in 2024, our performance so far this year has fallen short of our expectations,” Kempczinski said on the call, a transcript of which was made available by AlphaSense.
Consumers, especially those with low incomes, continue to eat at home more frequently, he said. The company has repeatedly extended the life of its value meals offering which it says has helped bring low-income earners back to the brand. McDonald’s said the increase in same-store sales in the United States was offset by declines elsewhere.
The decline in restaurant traffic has affected businesses across the industry. French fries maker Lamb Weston (LW), a McDonald’s supplier, said earlier this month that it expected this to continue into next year. Executives at ConAgra (CAG) and spice company McCormick (MKC) recently echoed those sentiments.
For McDonald’s — and other companies in the industry — the climate seems to point toward an ongoing battle for dollars from high-value diners.
“We’ve talked before about our customers recognizing us as a value leader versus our key competitors, but our value leadership gap has narrowed,” Kempczinski said on the call. “In response, we moved urgently in partnership with our franchisees to improve our value propositions in most of our key markets.”
#McDonalds #Fallen #Short #Year
