McDonald’s is planning to focus on “affordability” in the new year. McDonald’s CEO Chris Kempczinski shared during the company’s latest earnings call that sales have dipped in recent months as menu prices have increased. So the company is going to refocus on bringing in lower-income customers.
“I think what you’re going to see as you head into 2024 is probably more attention to what I would describe as affordability,” Kempczinski said during the call.
Kempczinski noted that global sales fell short from their quarterly expectations, partially as a result of the Middle East conflict and Israel-Hamas conflict, and also due to inflation, which he said has caused lower-income customers who make $45k and below to look elsewhere.
“Eating at home has become more affordable,” Kempczinski said, noting that a lower price point would likely “resonate” more with lower-income customers than “a value message.” He also explained that they haven’t noticed changes in behavior among middle and high income consumers.
“We certainly know consumers are more weary or weary of pricing, and we’re going to continue to be consumer led in our pricing decisions as we kind of look forward to 2024,” said Ian Borden, McDonald’s CFO, who added that franchisees set their prices.
Kempczinski pointed to the McDonald’s everyday value menu that sees prices at $1, $2, and $3. “I think you’re going to see probably some activity there in the U.S. at the local level to make sure we continue to provide good value for that low-income consumer,” he said, though he did not explain what kind of “activity” would take place.
McDonalds’ higher prices have been trending on social media in recent months. In July, 2023, one X user shared a photo of the prices for a Quarter Pounder with Cheese meal and Big Mac meal, which cost $17.99 and $17.59, respectively. Another photo showed a 10-piece Chicken McNuggets meal for $18.29.