McDonald’s trying to overcome weak sales growth

McDonald’s trying to overcome weak sales growth and slower fast-food traffic

On 30 April 2024, McDonald’s set the first four quarter results in which it mentioned Global comparable reports, systemwide sales, consolidated revenues, and other store sales for the quarter. 

In the report, McDonald’s mentioned a consecutive drop in sales growth and fast food traffic for the fourth quarter as customers who cannot spend their dollars stay reluctant to eat out from the fast food chains. So that’s why McDonald’s trying to overcome this by presenting value menu items. 

In the U.S., McDonald’s stores sales increased to 2.5% in the first quarter of 2024. On Tuesday, Chicago a fast food giant said, that all the marketing, digital, and delivery drove all the sales in the starting months of 2024.  But these sales resulted from a strategic menu price increase.

McDonald’s has grown the sales Globally by about 1.9% in the straight quarter.

In the financial performance of the first quarter:

Global Comparable Sales1.9%
Systemwide Sales3%
Consolidated Revenues5%
Diluted Earnings9%
Consolidated income8%

Comparable Sales for 2023 and 2024 (Quarters ended on March 31)

Comparable Sales20232024
International Developmental Licensed Markets12.6%0.2
International Operated Markets12.6%2.7

According to BTIG analyst Peter Saleh, “We anticipate activity to proceed to be negative and accept the normal check will stay beneath weight from the overwhelming reducing to recuperate lower-income buyer activity”

Traffic is also down in McDonald’s U.S. and other markets such as Australia, Germany, China, Canada, and Japan. To increase traffic, traffic-driving efforts should be better and strong enough with a national value platform. 

The company’s Revenues increased by 5% in the first quarter to $6.17 billion. 

Net income increased by about 7% to $1.9 billion in January-March.

In the International Operated Markets, the store sales increased by 2.7%.

One of the reasons behind the great decline in McDonald’s traffic is that McDonald’s has announced to provide free meals to Israel in the war in Gaza. In McDonald’s International market, sales fall about 0.2% in the first quarter. 

Kempczinski stated that McDonald’s has to establish a nationwide marketing and value message to back it up and overcome these situations. 

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