Chicago: McDonald's is re-evaluating its pricing strategy after a decline in sales due to reduced consumer spending. Sales at long-established outlets dropped by 1 percent from April to June compared to the previous year, marking the first such decline since the pandemic. Despite offering discounts to attract cost-conscious customers and those boycotting the chain over the Israel-Gaza conflict, the efforts did not prevent the sales dip.
As per reports, CEO Chris Kempczinski announced a "comprehensive rethink" of the company's pricing approach. He mentioned that McDonald's would focus more on discounts to curb the sales decline. Recent promotions like the 5 dollars Happy Meal in the US and a UK campaign offering three items for £3 are expected to continue and expand. The firm is also collaborating with franchisees on additional "value" initiatives.
Following the update, McDonald's shares rose by over 3 percent. Kempczinski emphasized the company's capability to implement these strategies effectively, stating, "We know how to do this. We wrote the playbook on value and we are working with our franchisees to make the necessary adjustments."
McDonald's has faced customer backlash after significant price hikes during the pandemic. Last month, the head of its US operations addressed these complaints in an open letter, stating that social media misrepresented the situation. He noted that the average price of a Big Mac in the US, now 5.29 dollars (£4.11), had increased by 21 percent since 2019, aligning with inflation, with many items seeing smaller price increases.
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