McDonald’s customers are starting to balk at higher Big Mac prices
Posted April 27, 2023 by: Admin
McDonald’s (MCD) had a strong first quarter, but the company is facing resistance from customers as higher prices for items like Big Macs and fries take effect. On the earnings call held on Tuesday, CEO Chris Kempczinski warned investors that the company was seeing more pushback on pricing than expected.
The typical cost-conscious McDonald’s customer is beginning to balk at the higher menu prices, leading to a decline in the key units per transaction measure. Some customers are opting for just a hamburger, while others are purchasing more premium dinner items but leaving out a dessert.
Kempczinski also commented on the current economic climate, reiterating his expectation for a mild recession in the US this year. Despite the challenges posed by a more challenging macro environment, Kempczinski expressed optimism about the company’s ability to perform well in good times and in bad.
As the stock continues to trade near a record high after a series of solid quarters, investors will be monitoring how much customers are buying per visit. With the resistance to pricing increasing, it will be important for McDonald’s to strike a balance between keeping prices competitive and maintaining profitability.
