Would you like to receive notifications on latest updates of the following headlines?

McDonald's Sales Fall Globally As Consumers Consider other Options

POSTED ON July 30, 2024 •   BUSINESS      BY Abiodun Saheed Omodara
Logo of McDonald's is seen in Los Angeles, California, United States, April 22, 2016. l Credit: Reuters

McDonald's reported a surprise decline in global sales in the second quarter, its first drop in 13 quarters, as budget-conscious consumers shied away from higher-priced menu items like the Big Mac. 

Persistent inflation has led lower-income consumers to shift to more affordable options at home, prompting fast food chains to focus on value meals to drive customer traffic. 

Despite the soft performance, McDonald's executives expressed optimism about the second half of the year, citing the success of a $5 meal deal launched in late June. 

The company also said it would be more selective with price increases to protect profitability.

"Even though things (traffic) are soft now, they should be getting better in the back half of the year ... with better value on the menu," said Brian Mulberry, client portfolio manager at Zacks Investment Management.

Global comparable sales fell 1% in the second quarter, compared with expectations of a 0.5% increase. Overall revenue rose 1%.
CEO Chris Kempczinski said there is a lot more deal-thinking from consumers who have become "very discriminating". 
"Consumer sentiment in most of our major markets remains low," he said.

McDonald's results dovetail with comments last week from Coca-Cola CEO James Quincey, who said there had been "some softness in away-from-home channels" in North America, an indication of fewer people eating out.

"The biggest hit for McDonald's is the low-income consumer has really cut back on visits and that is more than offsetting the typical trade down McD normally sees in tougher economic times," said Edward Jones analyst Brian Yarbrough.

US comparable sales fell 0.7% in the quarter ended June 30, compared with a 10.3% jump a year ago. Sales in international markets, which made up nearly half its 2023 revenue, dropped 1.1%, driven by weakness in France.

A slower-than-expected recovery in China and the Middle East conflict hurt the performance of McDonald's business segment where restaurants are operated by its local partners, as sales declined 1.3% compared with a 14% jump a year earlier.

Companies like McDonald's and Starbucks have also suffered from consumer boycotts linked to the Gaza war, which hit their sales in the Middle East markets.

McDonald's, however, stuck to its capital expenditure budget of up to $2.7 billion, with more than half of that earmarked for new restaurants in the US and international markets.

It earned $2.97 per share on an adjusted basis in the second quarter, missing expectations of $3.07.

READ ALSO
EFCC Warns Developers: "Don't Profit from the Proceeds of Crime
BY Abiodun Saheed Omodara August 7, 2025 0

ABUJA, Nigeria - The Economic and Financial Crimes Commission (EFCC) has raised concerns about the p...

READ ALSO
Tinubu Calls for Enhanced Regional Integration to Boost West Africa's Economic Competitiveness
BY Abiodun Saheed Omodara August 2, 2025 0

President Bola Tinubu has highlighted the crucial need for enhanced regional integration throughout...

READ ALSO
Dangote Advocates Affordable Housing Solutions at Africa International Housing Show
BY Abiodun Saheed Omodara August 1, 2025 0

Dangote Cement Plc has urged stakeholders in Nigeria's housing sector to adopt affordable mass housi...

READ ALSO
NOGASA Warns of Nationwide Disruptions as Dangote Refinery Plans Direct Supply to Consumers
BY Abiodun Saheed Omodara August 1, 2025 0

The Natural Oil and Gas Suppliers Association of Nigeria has issued a warning regarding the Dangote...

READ ALSO
NBS Reports Surge in Cooking Gas and Kerosene Prices across Nigeria
BY Abiodun Saheed Omodara July 31, 2025 0

The National Bureau of Statistics (NBS) has announced a rise in the average costs of cooking gas and...

READ ALSO
FG to Raise N796bn Annually from New 5% Petrol Surcharge
BY Abiodun Saheed Omodara July 31, 2025 0

The Federal Government is expected to generate N796bn annually from the implementation of a five per...

READ ALSO
Business Owners in Abuja Raise Alarm over Rising Operational Costs and Falling Sales
BY Abiodun Saheed Omodara July 30, 2025 0

Business owners in the Federal Capital Territory have voiced their worries about the escalating cost...

READ ALSO
33 African Startups Cease Operations in 30 Months Amid Shift to Sustainability
BY Abiodun Saheed Omodara July 30, 2025 0

In the last 30 months, from January 2023 to mid-2025, approximately 33 startups in Africa ceased ope...

OUR CHANNELS:

I Will Die on a Sunday After Church, Pastor Adeboye Envisions Peaceful Passing
BY Abiodun Saheed Omodara August 9, 2025 0

The General Overseer of the Redeemed Christian Church of God, Pastor Enoch Adejare Adeboye, has reit...


Starmer Calls for Ceasefire and Humanitarian Aid as Gaza Situation Deteriorates
BY Abiodun Saheed Omodara August 9, 2025 0

The Prime Minister of the United Kingdom, Keir Starmer, has urged the Israeli government to rethink...


CP Shogunle Explains Omoyele Sowore's Arrest
BY Abiodun Saheed Omodara August 9, 2025 0

The Commissioner of Police for the Special Intervention Squad, CP Abayomi Shogunle, has clarified th...


Lens Signs World Cup Champion from Udinese
BY Abiodun Saheed Omodara August 10, 2025 0

French World Cup champion Florian Thauvin made his return to Ligue 1 on Friday as Lens announced the...


Nigerian Navy Shuts Down 70 Illegal Refineries, Seizes Over 400,000 Liters of Stolen Crude
BY Abiodun Saheed Omodara August 9, 2025 0

The Nigerian Navy has reported that its Special Forces shut down over 70 illegal refinery operations...


U.S. Raises Bounty on Maduro to $50 Million amid Drug Trafficking Allegations
BY Abiodun Saheed Omodara August 10, 2025 0

The United States has increased its bounty on Venezuelan President Nicolas Maduro—who is facin...


FG to Prosecute K1 De Ultimate after NCAA 6months flight Ban
BY Abiodun Saheed Omodara August 8, 2025 0

The last may not have been heard on the faceoff between Fuji musician, Wasiu Marshal, popularly call...


Scores Die During Plane, Train Crashes in Kenya
BY Abiodun Saheed Omodara August 10, 2025 0

No fewer than 10 persons including doctors and nurses have been confirmed dead following an aircraft...


Foreign Investors Pull Out N576.09 Billion from Nigerian Equities in H1 2025
BY Abiodun Saheed Omodara August 10, 2025 0

Foreign investors divested from equities totaling N576.09 billion on the Nigerian Exchange from Janu...


EFCC Warns Developers: "Don't Profit from the Proceeds of Crime
BY Abiodun Saheed Omodara August 10, 2025 0

ABUJA, Nigeria - The Economic and Financial Crimes Commission (EFCC) has raised concerns about the p...


More Articles

Load more...

Menu