QSRs See Customers Push Back on Prices

Customers are making their opinions known about higher prices.

February 13, 2024

QSRs are seeing consumers complain about the cost of fast food and companies are feeling the pushback.

McDonalds reported weaker-than-expected sales at its U.S. stores, CEO Chris Kempczinski addressed McDonald’s “affordability” problem, and indicated the chain would cut prices on some menu items, said CNN.

“Eating at home has become more affordable,” Kempczinski said.

Part of the problem, said CNN, is that although grocery prices are still high, they rose just 1.3% overall in 2023, compared to dining out, which surged 5.2%, according to the latest Consumer Price Index report.

“We actually saw that cohort”—customers making $45,000 or less decrease in the most recent quarter,” Kempczinski added.

During the report, Kempczinski didn’t offer details on the timing or size of any price cuts. In a statement to CNN, McDonald’s reiterated “its commitment to providing affordable options to consumers.”

CCN shared that on TikTok, it’s a common refrain for McDonald’s customers to say the company has gone too far, charging more than $3 for a single hash brown in some locations.

Yum Brands, parent company to Taco Bell, KFC, and Pizza Hut, may be facing similar issues, after also reporting weaker-than-expected sales in the fourth quarter, according to CNN.

In particular, Taco Bell reported sales at restaurants open at least a year grew 3% for the quarter—a decline from the 11% growth it registered for the same quarter a year earlier when a revamped breakfast menu and its Mexican Pizza fueled sales.

Pizza Hut’s U.S. sales slid 4% in the fourth quarter and KFC sales were flat. In total, same-store sales at all three chains rose 1% in quarter, missing analysts’ estimates of a 3.9% increase.