"Reducing Dining Out Expenses Amid High Inflation"… McDonald's Q2 Sales Decline for the First Time in 4 Years

Q2 Sales Down 1% YoY
"Fewer Visits from Low-Income Groups in Key Markets Including the US"

As Americans cut back on dining out due to high inflation, McDonald's sales have declined for the first time in four years. Concerns are rising that the consumer spending capacity supporting the U.S. economy may have reached its peak.

[Image source=Yonhap News]

On the 29th (local time), McDonald's announced that its global same-store sales for the second quarter of this year decreased by 1% compared to a year earlier, recording $6.49 billion. This is the first time McDonald's sales have declined since 2020.

Net profit for the second quarter was $2 billion, down 12% from the previous year. Adjusted earnings per share (EPS) stood at $2.97.

McDonald's second-quarter sales and net profit figures also fell short of expert expectations. Earlier, market research firm LSEG had forecasted McDonald's second-quarter sales at $6.61 billion and adjusted EPS at $3.07.

The decline in McDonald's sales is attributed to rising prices and the depletion of excess savings accumulated during the pandemic, which has led to fewer customer visits. Previously, McDonald's raised menu prices to reflect increases in raw material costs and labor expenses.

Chris Kempczinski, McDonald's CEO, stated, "Low-income consumers have started reducing their visits since last year," adding, "This slowdown is spreading across the U.S. and other major markets."

According to CEO Kempczinski, even customers visiting McDonald's are reducing the number of items they purchase or opting for cheaper products. As a countermeasure, McDonald's launched a $5 hamburger set as a limited-time offer at the end of June and has recently extended the sales period, striving to attract customers.

Although the U.S. inflation rate has slowed in the second quarter, overall living costs, including groceries and dining out, have already risen significantly. As a result, Americans are cutting back on food expenses to cope with high inflation. According to the U.S. Department of Agriculture, household grocery spending fell by an average of 3.1% compared to the previous year.

While strong retail sales, which account for two-thirds of the U.S. real economy, helped the second-quarter economic growth rate exceed market expectations and maintain economic resilience, recent signs of cooling in the labor market have raised concerns that consumption may weaken in the second half of the year, potentially slowing the economy.

U.S. ABC News reported, "Consumers tired of inflation are giving up dining out or choosing cheaper options, leading to McDonald's sales decline for the first time in four years."

This content was produced with the assistance of AI translation services.