Reuters – Menu price hikes and a new loyalty program helped McDonald’s beat estimates for quarterly sales and profit April 28, despite inflationary pressure on consumers, the war in Ukraine and COVID-19 lockdowns in China.
Pinched by higher costs for gas, rent and groceries, lower-income customers are starting to buy cheaper or fewer McDonald’s menu items in some areas, chief executive officer Chris Kempczinski said in a call with investors.
In “certain parts of the business and in certain geographies, there is a little bit of a trade down that we’re seeing that we’re just keeping an eye on,” he said. “We need to make sure that we continue to have value be an important part of our proposition.”
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Even so, the world’s largest burger chain saw little resistance to menu prices that were roughly eight per cent higher in the first quarter versus the prior year.
Most U.S. restaurant chains have raised prices to offset soaring costs for everything from worker salaries to beef and paper packaging.
