McDonald's CEO Says That 'Affordability' Is on the Way as Company Struggles Through Sales Slump The company shared its Q4 2023 earnings in a call with analysts on Monday.
By Emily Rella
McDonald's might be tweaking its menu soon with a focus on "affordability," the company's CEO hinted.
On an earnings call Monday, McDonald's CEO Chris Kempczinski said that sales in the last quarter took a negative turn, thanks to higher menu prices.
"I think what you're going to see as you head into 2024 is probably more attention to what I would describe as affordability," CEO of McDonald's Chris Kempczinski said on Monday during an earnings call.
The burger behemoth saw its first quarterly sales miss internationally in nearly four years during Q4 2023 due to conflict in the Middle East affecting its international sales growth, something McDonald's believes will continue to affect revenue into Q1 2024 and potentially Q2.
Related: McDonald's Is Completely Changing Its Burgers in 2024
Global same-store sales grew 3.4% quarterly, compared to a 4.7% estimated growth by analysts.
The U.S. business for the chain also weakened as trends pointed toward low-income customers choosing cheaper menu items or ordering less overall, with U.S. sales rising just 4.3% quarterly compared to a 4.4% estimated increase.
"Eating at home has become more affordable," Kempczinski said during the call. "The battleground is certainly with that low-income consumer."
Kempczinski didn't specify what the new steps toward "affordability" would be, but the company has been raising menu prices for years. In a Q3 2023 earnings call, McDonald's CFO Ian Borden admitted that the chain expected to see menu prices increase 10% by the end of 2023.
This was up from a separate 10% menu price hike from 2022 to 2023.
An estimated 93% of McDonald's 38,000 locations are franchised, meaning that franchisees can set prices based on the store's location and the demand.
Related: McDonald's in Connecticut Goes Viral For Astronomical Prices
In July 2023, a rest-stop location of McDonald's in affluent Darien, Connecticut went viral after a visitor found the menu prices to be abnormally expensive, including a 10-piece McNugget order for $18.29 and a McCrispy sandwich for $17.99.
McDonald's was up just over 6.7% in a one-year period as of Monday afternoon.
