McDonald’s fell as customers cut back on spending
McDonald’s fell close to four percent on Wednesday after its chief financial officer said the fast food chain faced a challenging environment that hindered sales in the early months of 2024. McDonald’s CFO Ian Borden said low-income customers have pulled back spending on fast food and other types of restaurants. The fast food giant said it wants to increase its share of the chicken market and plans to test a larger burger.
McDonald’s (MCD) shares fell nearly four percent on Wednesday after the fast food chain’s chief financial officer (CFO) said at an investor conference that low-income customers of the company are choosing to eat out less often.
CFO Ian Borden said at an event on Wednesday that concerns about inflation and possibly exhausted pandemic savings mean many consumers are spending less on fast food and other kinds of restaurants.
“You’re starting to see food-at-home inflation versus food-away-from-home getting back to its more, I think, historical dynamic, meaning I think some of these consumers are just choosing to eat at home more often,” Borden said.
Borden also touched on severe winter weather in January that affected sales and earnings in some countries like France, China and regions like the Middle East that have started the year below expectations.
Last month, McDonald’s reported a negative effect on sales from boycotts linked to the Israel-Hamas war. During Wednesday’s presentation, Borden said, “we continue to address the effects of the war in the Middle East.”
Borden also said McDonald’s is looking to increase sales in areas such as chicken-based menu items and plans to test some larger hamburger items. Another area Borden said the company wants to improve is coffee, both in terms of the overall flavor and consistency that customers get across different locations.
McDonald’s shares have lost nearly 5% of their value so far this year.
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