Enough of the $29 KFC bucket and the $18 Big Mac meal! Americans fed up with rising fast food prices are voting with their feet as McDonald’s, KFC, Pizza Hut and Taco Bell sales disappoint
- Fast food chains report poor sales as price increases deter consumers
- McDonald’s CEO says it should focus on ‘affordability’ by 2024
Americans are turning their backs on fast food as some of the country’s largest franchises continue to raise the prices of what were once affordable meals.
Explaining the first quarterly sales loss in nearly four years, McDonald’s CEO told investors this week that consumers are spending less than $45,000 a year less at their restaurants.
“Eating at home has become more affordable,” says boss Chris Kempczinski. ‘The battleground certainly lies with those consumers with a low income.’
“I think what you’re going to see as you get into 2024 is probably more of a focus on what I would describe as affordability,” he added.
Bret Kenwell, investment analyst at eToro, told DailyMail.com: “During the conference calls, management teams recognize the monetary pressure that certain consumer groups are feeling.”
Americans are turning their backs on fast food as some of the country’s largest franchises continue to raise the prices of what were once affordable meals
McDonald’s CEO Chris Kempczinski said the company would focus more on affordability in 2024 to ensure it appealed to lower-income families.
It comes as videos showing shockingly high fast food prices have gone viral on social media, reinforcing the idea that the days of $1 value menus are long gone.
McDonald’s was recently criticized online after one of its restaurants in Connecticut was busted for selling a Big Mac meal for $17.59.
Then a photo of a receipt from another McDonald’s in Connecticut went viral on X because it was charging $7.39 for just one Egg McMuffin.
Last quarter, McDonald’s sales were up just 3.4 percent compared to the same quarter in 2022, well below Wall Street expectations of 4.7 percent.
The problem is not exclusive to McDonald’s. This week, Yum Brands, the parent company of KFC, Pizza Hut and Taco Bell, also reported disappointing results.
Last month, a viral video showed someone discovering a 12-year-old Taco Bell receipt, showing that Americans could once buy two of the chain’s hearty five-layer burritos for $2.59. They are now more than double the price in most restaurants.
Taco Bell is the top earner of the Yum group in the US and has traditionally been known for its value offers. Sales grew by only 3 percent last quarter, which is well below the 11 percent growth of the previous year.
Pizza Hut’s turnover fell by 4 percent and KFC’s turnover remained stable.
Laura Murphy, director of PR agency Bolt, which specializes in food and drink marketing, told NBC News that people just want cheap food.
A photo of a receipt issued by a McDonald’s at a rest stop in Connecticut that charged $7.39 for an Egg McMuffin
“People are saying to leaders in the fast food industry, ‘This is what we’re looking for, this is what we want. We want efficiency. We want affordability,'” she said.
‘Let’s get back to offering simple food in an affordable way that is efficient, fast and really gives people the basics of what they are looking for.’
As Kempczinski suggests, consumers’ declining appetite for fast food coincides with the increasing affordability of groceries.
The cost of food at home, as reported by the Bureau of Labor Statistics, increased only 1.3 percent between December 2022 and December 2023. Meanwhile, the cost of food away from home was up 5.2 percent over the same period.
“There has been a steady increase in prices for ‘away from home’ food, both in recent months and over the past year,” Kenwell said.