If you’ve noticed that fast food prices are getting absurdly high lately, you’re not alone. Have you hit the McDonald’s drive-through lately? You may as well go to a sit-down restaurant if you’re going to pay close to $20 for a Big Mac meal.
The company has been trending on social media as people have pointed out that inflation (and a healthy dose of corporate greed) have driven up prices for what should be some of the cheapest food around, putting it out of reach for, well, pretty much everyone.
This was at a rest stop, but these McDonald’s prices are nuts right??? pic.twitter.com/0qq8Ima3ZA
— Sam Learner (@sam_learner) July 18, 2023
And thanks to cause and effect, McDonald’s saw a dip in its sales as its prices increased. The company’s CEO Chris Kempczinski shared that information on a recent earnings call where he also revealed that to combat slowing sales, McDonald’s will renew its focus on “affordability” in 2024 in an attempt to win back “low-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 explained on the call that McDonald’s global sales fell short of the company’s expectations at the end of 2023, in part because of ongoing conflict in Israel, and because inflation and soaring prices have forced lower-income customers (primarily those making less than $45,000 a year, according to Kempczinski) to go elsewhere to eat.
“Eating at home has become more affordable,” he added, noting that behavior hasn’t changed among middle- and high-income customers, and that lower prices were more likely to “resonate” with low-income customers than “a value message.”
Ian Borden, McDonald’s CFO, added, “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.”
Borden also noted that individual McDonald’s franchises set their own prices, so it’s unclear what the corporate office is going to do to lower them. Kempczinski mentioned the Everyday Value Menu on the call, which once had items for $1 and $2, but is now closer to $5.
“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 didn’t specify what that “activity” might be.