McDonald’s took a hit last quarter as visits from lower-income customers decreased, reported The Washington Post.
“The fast-food behemoth saw traffic among the cohort drop ‘nearly double digits’ in its latest quarter, chief executive Christopher Kempczinski told investors in an earnings call Wednesday. These customers are disproportionately feeling the strain of mounting economic pressures, including higher prices on groceries and apparel as well as the growing cost of rent and childcare, he said,” according to the Post.
“There’s some significant inflation there that the low-income consumer is having to absorb, and I think that’s affecting their outlook and their sentiment and their spending behavior,” Kempczinski said.
Strength across its U.S. and international markets helped the burger chain post global same-store sales growth of 3.6%, slightly ahead of analysts' average estimate for a 3.55% increase, according to data compiled by LSEG, wrote Reuters.
Meanwhile, traffic among higher-income customers reportedly continues to grow, increasing “nearly double digits” in the quarter, per Kempczinski. The trend is industry-wide, Kempczinski noted.
The QSR’s same-store sales grew 2.4% in the United States over last year, a slight decline from the last quarter’s 2.5%, and increased 3.6% globally, with overall sales hitting $36 billion, an 8% growth year-over-year, the Post wrote.
“McDonald’s is the latest example of a growing bifurcation among U.S. consumers. The wealthiest Americans are fueling consumer spending, while the working class—bogged down by waning wage growth, grocery inflation and the rising costs of living—are forgoing dining out and impulse purchases, according to economists and industry experts,” the Post said.