Lindelani Njolo

McDonald’s Faces Sales Slump: Worst Quarter Since Pandemic Highlights Challenges

McDonald’s, the world’s largest burger chain, last week said it delivered its weakest sales since the height of COVID, as inflation, changing tastes and war take their toll. In the first quarter of 2024, the company’s worldwide comparable sales increased by 1.9 per cent, an almost trend from last year’s first-quarter growth of 129 per cent. Sales within its International Developmental Licensed Markets segment which includes the Middle East and China fell 0.2% down, marking its first decline since late 2020. This slowdown raised doubts over McDonald’s ability to adapt to the rapidly changing economy and competition. A sustained inflationary environment is compromising the budgets of consumers, hurting McDonald’s sales. The company has raised menu prices about 10% in last one year for covering their rising labor and ingredient costs but it has alienated core lower-income customers. CFO Ian Borden said consumers “are becoming more discerning with every dollar they spend,” which has affected traffic, in particular among those households earning less than $45,000 a year. As grocery prices steady, many diners on a budget would rather eat at home than pay for fast food. This contrasts higher-income customers whose mainstay has become better-quality fast-casual chains like Chipotle or Sweetgreen.