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They're not lovin' it. Despite launching $5 value meals to lure customers back, McDonald’s is grimacing as its sales last quarter sputtered. Customers are cutting back, and Mickey D's may be the Early Birdie of what's to come for restaurants. The Golden Arches are losing a bit of their shine these days. While McDonald's are betting on value meals, the chain will likely need to come up with other solutions to get customers to spend. And Ronald isn't alone. Facing mounting economic pressures, consumers are reducing spending on food away from home, leading to decreased foot traffic and lower overall sales for major chains like Starbucks, Burger King, and Wendy's. Worse for Ronald and crew is the pullback isn't just here in the U.S. but globally. The Grandma McFlurry won't be enough. Rising fast food prices have in the eyes of some customers turned them into a luxury, and that's a significant issue when they have plenty of options available to them both dining out and through food delivery services. For McDonald's, the chain is also looking at new menu items, but those take time to build awareness and interest. The next few quarters will be interesting, not only for McDonald's, but for the entire restaurant industry. While inflation is cooling off, that doesn't necessarily mean groceries are. Left with difficult choices, consumers will likely cut back on dining out or buying other food away from home https://lnkd.in/efSwnCHc #mcdonalds #restaurants #fastfood #inflaton #consumers #economy

Wingstop Restaurants Inc., Texas Roadhouse, Chipotle Mexican Grill, and Domino's are recent outperformers among popular restaurant chains. 🍔 What do they have in common? They keep their prices down. Consumers are less likely to spend money at restaurants, and when they do, they choose these chains that they know will give them a bang for their buck. 💸 Learn more about this method and its effects in this article from The Wall Street Journal. https://on.wsj.com/4bOvamk #RestaurantExperience #CX #PricingStrategy

Have QSR menu price increases hit a tipping point? The newest data offered by Bloomberg indicates just that. Due to different market pressures such as inflation or wage increases (California), the gap in price between fast food and fast casual menus has become small enough that consumers are making a shift towards healthier options like sweetgreen, CAVA, or Chipotle Mexican Grill. Over the last four years, the number of Fast Casual Restaurants has grown twice as fast as their QSR counterparts. In 2024 alone, CAVA's stock price went up 96%, and all eyes are going to be on their earnings report next week. In an attempt to bring back some of these clients brands are starting to offer more price-conscious menu like McDonald's new $5 meal option, or Roll Em Up® Taquitos new initiative to provide meals you can purchase with a $10 bill. This is not necessarily a grand revelation, pricing has been at the forefront of mind of franchisors, franchisees, and consumers for quite some time. While the easiest fix would be to lower prices, that is simply not possible in today's economy. If anything we're only going to see prices rise further. QSR brands are going to have to get creative with how they work to bring back some of those customers who have left for a Fast Casual experience or have chosen to go back to the grocery store. Would love to hear some feedback on what you've seen brands doing to combat the consumer v. menu board battle going on today! #franchise #menuprices #inflation #fastcasual #QSR https://lnkd.in/eQdySz82

🍔 McDonald's is extending its $5 value meals to address reduced traffic amidst inflationary pressures. This move reflects the QSR and Convenience Store industry's pivot towards affordability in response to current economic challenges. https://lnkd.in/e44NXvmw #RestaurantIndustry #Inflation #EconomicChallenges #ValueMeals #Affordability #Bloomberg

Of course eating out can be an increasing lost-cause industry, with prices quickly continuing to go up, possibly most serious to the most marked-up outlets: fine dining, then fast food and food courts. And why not mention coffee shops, then hawker centres? Local street food is no longer cheap. Neither is cooking at home cheaper soon, not with the continuing occupation by premier brands. Prepare to eventually starve, in appetite or of money.

This Hasn’t Happened to Restaurant Spending Since the Pandemic:  A sign of financial stress? Sales at bars and restaurants in the U.S. have fallen in four of the past six months for the first time since the pandemic. Restaurant spending is often a good cue for the health of the broader economy. Retail sales have been volatile month-to-month so far this year as more consumers struggle under the weight of rising prices, higher interest rates, and dwindling savings, said chief U.S. economist Scott Anderson of BMO Capital Markets.A new survey by KPMG, for instance, found that 41% of consumers said they plan to spend less on restaurants this year. Only 21% said they would spend more. The cost of takeout and dining out has risen 4% in the 12 months ended in May. And prices to eat out are up a whopping 35% since the pandemic. Read more at  MarketWatch.

Interesting news today that Yum! Brands, owner of KFC, Pizza Hut, and Taco Bell, saw a decline in sales for the first time since the pandemic. This could signal a shift in consumer spending habits, with people dining out less often. What do you think is driving this? Is it inflation causing sticker shock, or are preferences changing? Recently, Red Lobster, another seafood restaurant chain, has also been facing financial difficulties. While they haven't declared bankruptcy yet, this highlights the challenges facing the restaurant industry. Maybe the decline in sales faced by Restaurants in the US points to a need for menu innovation, an overhaul of the management structure or promotions to keep up with the competition. I will be glad to receive thoughts on this. #fastfood #restaurants #consumertrends #inflation #yumbrands #kfc #pizzahut #tacobell #redlobster

Some less than compelling results from McDonald's this morning. In the US, comparable restaurant sales declined by 0.7%. Globally, comparable sales are down by 1% – the first time the metric has declined since the final quarter of 2020. What worries investors, many of which were expecting a very modest rise in US comparable sales this quarter, is the trajectory of the business. Last year, McDonald’s was performing well as price increases and the Grimace Birthday Meal offer created good growth. Things, however, have taken a turn with sales growth becoming progressively worse. The primary problem is that consumers have been deterred by price hikes. From one of our recent consumer surveys, 72.4% of people now say that fast food is now too expensive to be a cheap treat. As a result, diners are using fast food restaurants less. This trend isn’t going away anytime soon, which is why McDonald’s recently took the decision to extend its $5 meal deal offer. The problem is that other operators are also feeling the pinch and are offering discounts. As a result, the spoils will be spread more widely and the squeeze on the QSR or fast food sector will remain. Balancing this against the rise in opertaing costs will be extremely challenging. #retail #retailnews #foodservice #fastfood #dining #consumers #economy

Higher costs and inflation-weary consumers are starting to erode sales across much of the U.S. restaurant industry. Traffic last year, while 1% higher than in 2022, remained 8% below pre-pandemic levels, according to market research firm Circana. Many Chipotle customers, though, are still willing to pay. The California-based chain’s same-store sales grew 8.4% last quarter, outpacing rivals including McDonald’s and Starbucks’s U.S. operations. Chipotle has reported better-than-expected earnings for four straight quarters, according to FactSet. It is one of the industry’s fastest-growing chains, with plans to build around 300 new locations this year. #growth #inflation #prices #chipotle

Burger King’s parent company has been on a rollercoaster this year, and it offers the best insight into how the economy is impacting restaurants.    Restaurant Brands International reported an overall drop in Q3 net income from $360 to $252 million.    The company’s most popular brand, Canadian Tim Hortons, which accounts for 60% of total revenue, brought in strong sales that nonetheless shrank due to unfavorable exchange rates. Meanwhile, U.S.-based Burger King stores saw in-store traffic flatten leaving the company no option but to use higher priced menu items to push net sales growth up by 7%. This still though fell below Wall Street’s expectations.     For all of this to come after the firm spent $400 million to revamp their restaurants, menu, and advertising, it feels like the company is running on fumes.   This is not to mention, they've had to close 1,000's of locations due to underperformance.    https://lnkd.in/etSvhjby #tagex #liquidations #furnitureauctions #furnitureliquidations #equipmentliquidations #equipmentauctions #businessliquiditions #foodindustrynews #foodserviceindustry #foodindustrynews #kitchenquipment #restaurantequipment #commercialkitchenequipment #restaurantauctions #restaurantclosures #restuaranttrends #restaurantnews #cfo #coo #foodindustry #foodindustryequipment #liquidaterestaurant #openrestaurant #expandrestaurant #foodoperations #restaurantclosure #restaurantremodel #restaurantliquidation