Latest news with #Kempczinski
Miami Herald
7 hours ago
- Business
- Miami Herald
McDonald's CEO raises alarm bells about customer losses
McDonald's (MCD) recently saw a glimmer of hope over the past three months, after its sales decreased for several financial quarters amid consumer backlash over inflated menu prices. In McDonald's second-quarter earnings report for 2025, the company noted that its U.S. sales increased by 2.5% year-over-year, while overall revenue spiked by 5%. Don't miss the move: Subscribe to TheStreet's free daily newsletter However, recent data from found that average customer visits per McDonald's location remained flat during the quarter. Related: McDonald's faces another major boycott from customers The increase in sales comes after McDonald's has ramped up efforts to win back customers by focusing on value and affordability. Last summer, it launched its $5 Meal Deal. Then, earlier this year, it introduced its McValue menu, which introduced its Buy One, Add One for $1 deal and a new burger meal deal called Daily Double. McDonald's also recently added Snack Wraps back to menus and made McCrispy Strips a permanent menu item. In May, the fast-food giant even extended the hours of its locations, with many now open 24/7 and others open past midnight. Image source:During an earnings call on Aug. 8, McDonald's CEO Chris Kempczinski said that despite increased consumer momentum surrounding its new value offerings and menu changes, it is still losing low-income consumers while gaining middle- and high-income customers. "The U.S. remained challenging as visits across the industry by low-income consumers once again declined by double digits versus the prior year period," said Kempczinski. "Reengaging the low-income consumer is critical as they typically visit our restaurants more frequently than middle- and high-income consumers." He said low-income consumers are facing macroeconomic pressures, which are causing them to purchase fewer menu items, skip meal occasions or eat at home. "With the low-income consumer, despite improvements in wage gains, real incomes are down," said Kempczinski. "That absolutely is going to put pressure on visits into the QSR industry. Second thing is there is a lot of anxiety and unease with that low-income consumer. I think we could all speculate the reasons for that, probably tariffs and the impact that that might have, questions around employment situation." Related: Wendy's hopes to win back customers with free offer Kempczinski also said that McDonald's breakfast sales are under pressure as consumers cut back their spending. "The breakfast daypart is the most economically sensitive daypart because it's the easiest daypart for a stressed consumer to either skip breakfast or choose to eat breakfast at home," said Kempczinski. Many consumers nationwide have indeed been scaling back fast-food purchases as prices rise for everyday goods. According to KPMG's Consumer Pulse Summer 2025 report, 69% of U.S. consumers in the survey said they eat at home more often rather than dining out, and 85% said that saving money was the main reason for this decision. To help reverse this major shift in customer behavior, McDonald's is relying on its loyalty program and McValue menu, which both allow customers to purchase menu items at lower prices, to boost sales. Kempczinski said that roughly 50% of the fast-food chain's customers take advantage of these offers, and those who don't may develop a negative perception of McDonald's prices. "Today, too often, if you're that consumer, you're driving up to the restaurant and you're seeing combo meals (that) could be priced over $10, and that absolutely is shaping value perceptions in a negative way," said Kempczinski. "So we've got to get that fixed." He also said that it can be beneficial for the company to further roll out nationally advertised price points for menu items, which can also help attract more customers since "their value perceptions are most influenced" by "core menu pricing." "I think there still is absolutely a need and a benefit for having nationally advertised price points," said Kempczinski. "And we know that when you have a nationally advertised price point, it drives significantly more incrementality than if everybody is off sort of doing their own pricing, which is what we're doing with the Snack Wrap, the $2.99." McDonald's recent customer struggles come after it faced a nationwide weeklong boycott in June, which was organized by The People's Union USA. More Food + Dining: Papa Johns makes major menu change to win back customersSteak 'n Shake's beef tallow fries aren't as healthy as they appearChick-fil-A angers customers with major change in stores The group organized a McDonald's boycott due to frustrations over the fast-food chain allegedly paying less taxes than its employees. The People's Union USA also took issue with McDonald's dramatic price increases, anti-union tactics, exploitation of global supply chains and environmental loopholes, and its weak support for diversity, equity, and inclusion. In June, the number of customers that visited McDonald's stores declined by 2% year-over-year, according to recent data from McDonald's sales once again face a significant threat, as The People's Union USA kicked off another boycott of the fast-food chain, which started on Aug. 1 and will last until the end of the month. Related: Chick-fil-A angers customers with major change in stores The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
USA Today
a day ago
- Business
- USA Today
McDonald's cooks up a hot summer menu with Snack Wraps, Daily Double, more
The Summer of Snack Wraps at McDonald's also has seen the fast-food giant adding limited-time items such as the Daily Double cheeseburger and Lil McDonald's Happy Meals – all to spur more visits. McDonald's is serving up a summer of new menu items, plus specials – and is loving the results. This summer, McDonald's has leaned into new and limited-time menu items, as a move to attract more customers – returnees, as well as new and lapsed ones. Spring brought offerings such as McCrispy Strips (now part of the permanent menu) and limited-time items including Squishmallows Happy Meals, 'A Minecraft Movie' Happy Meals and the Hershey's S'mores McFlurry. Since late June, McDonald's released a quintet of new menu items including a new double cheeseburger, the Daily Double (to be on the menu through 2025), and the return of Snack Wraps after a nine-year absence. Krispy Kreme's Pumpkin Spice Menu: See the doughnuts, lattes coming in August McDonald's chairman and CEO Chris Kempczinski hopes the wave of new items – along with its popular $5 Meal Deal and McValue Menu, both expected to run through the end of the year – will lead to another successful sales boost, similar to the 5% boost in revenue and 2.5% increase in same-store U.S. sales McDonald's saw from April 1-June 31. Those financial results, released Aug. 6, represent an improvement from McDonald's sluggish start in 2025, which brought a 3% revenue decline and 3.6% dip in U.S. sales during the company's first quarter (Jan. 1-March 31). 'Compelling value, standout marketing, and menu innovation" helped drive the second quarter performance, Kempczinski said in the report. Here's what you need to know about McDonald's menu newest offerings. McDonald's menu: Snack Wraps return The Snack Wrap, made up of one of McDonald's new all-white chicken meat McCrispy Strips, lettuce and cheese in a flour tortilla, returned to the menu July 10 (available in Ranch and Spicy flavors). The first weekend it hit the menu, Snack Wraps brought in diehard McDonald's fans – many who had already visited the restaurant 56 times in 2025, more than two times the average McDonald's customer – according to a July 14 survey of 206 verified receipt-based early buyers of McDonald's Snack Wraps conducted by market research firm Numerator. As for Snack Wraps, 90% of buyers would be willing to buy them again, according to the survey. "For McDonald's, (limited time offerings) function as much a loyalty driver as they do an acquisition tool," Mitch Louch, principal strategist at Numerator, told USA TODAY. The $2.99 à la carte price is expected to remain throughout 2025, Kempczinski said Aug. 6 during a conference call with investment analysts, according to a transcript from S&P Global Market Intelligence. You can also order a combo meal with two Snack Wraps, a medium fry and a drink of choice. McDonald's dessert menu gets Blueberry & Crème Pie The Blueberry & Crème Pie, which hit the menu on June 27, is served warm and described as "a twist on the classic McDonald's sleeved pie," according to the fast food chain's online menu spotter. The pie will remain available nationwide through most of the summer (expected departure date is Sept. 1). McDonald's menu addition: The Daily Double At the end of June, McDonald's made the Daily Double cheeseburger available nationwide. Previously only available in limited markets the burger will be available nationally through 2025, the company says. The burger, made with two beef patties, a slice of American cheese plus shredded lettuce, slivered onions, mayo and two tomato slices, is a bit different from the McDouble. The McDouble cheeseburger also has two patties and just one slice of cheese, plus pickles, diced onions, ketchup and mustard – no lettuce, tomato or mayo – and can be ordered as a Bacon McDouble, too.. As of July 22, you could order a Daily Double McValue Meal Deal ($6 or $7; pricing depends on your restaurant) with a 4-piece order of Chicken McNuggets, small fries, and a small soft drink. Spicy McMuffin breakfast sandwiches McDonald's added three spicy breakfast menu items as of July 8: the Spicy McMuffin, Spicy Sausage McMuffin, and Spicy Sausage McMuffin with Egg. The spicier take on the dish is part of the fast food chain's 50th anniversary celebrations for the McMuffin. Hershey's S'mores McFlurry still on McDonald's menu This limited-time dessert offering, which arrived on the menu June 10, blends pieces of Hershey's Milk Chocolate, graham crackers, and marshmallows with McDonald's vanilla soft serve. Lil McDonald's Happy Meals: also still on McDonald's menu Lil McDonald's Happy Meals remain available for a limited time, while supplies last, following their July 1 arrival. Among the 21 toys are miniature versions of food plates, ordering kiosks, delivery trucks, checkout registers, french fries, soft drink machines, and restaurant seating booths. Squishmallows Happy Meals made a return A month ahead of summer, McDonald's brought back Squishmallows Happy Meals, which come with one of a dozen plush toys, for the first time since December 2023. The meals became available May 13 and have left the menu. A sign of their popularity? Individual toys are still priced as high as $50 on eBay and complete sets of the Squishmallow toys are priced at about $70. New Happy Meals coming soon to McDonald's: McDonaldLand Meals, as soon as Aug. 12, with collectible tins filled with postcards, stickers and more items paying tribute to a McDonald's fantasy world introduced in 1971, and Teenage Mutant Ninja Turtles x Hello Kitty and Friends Happy Meals, each with the figurine of a mashed-up Turtles and Kitty character (starting Aug. 12). Another summertime move by McDonald's: a majority of U.S. locations are staying open until midnight or later throughout the summer, the company announced in May. While McDonald's is pleased with the spring and early summer, Kempczinski said during the Aug. 6 earnings call he wasn't ready to claim a victory in the current three-month period, saying "we remain cautious about the overall near-term health of the U.S. consumer." Contributing: Greta Cross, Gabe Hauari, Jonathan Limehouse, and Anthony Robledo, USA TODAY. Mike Snider is a national trending news reporter for USA TODAY. You can follow him on Threads, Bluesky, X and email him at mikegsnider & @ & @mikesnider & msnider@ What's everyone talking about? Sign up for our trending newsletter to get the latest news of the day
Business Insider
2 days ago
- Business
- Business Insider
There's a spending split between Americans, and it's popping up from McDonald's to Uber
If you've been waiting for the shoe to drop on the US consumer economy, keep waiting. Strong results from some retail brands during the first half of this year are defying the economic warning bells that have been ringing for several quarters now. Recent earnings calls have revealed a pattern that points to a continued split in Americans' spending, and some CEOs are approaching the gap with caution. 2 types of spending Looking at brands across the consumer economy, a tale of two shoppers emerges. While consumers with annual earnings of at least $100,000 increased their spending in the first six months of 2025, those making less than $50,000 a year did almost the exact opposite, pulling back on spending each month, Morning Consult's lead economist, Kayla Bruun, wrote last week. "The story is inconsistent across income groups," Bruun wrote. Amazon CEO Andy Jassy said last week that the e-commerce juggernaut saw the biggest-ever Prime Day event and that tariffs haven't caused much of a dent in the retail business. "In the first half of the year, in the first half, we just haven't seen diminished demand," he said. And Costco said said Wednesday that fiscal year comparable sales in the US are up 6.2% from the prior year, with visits up 4.3% in the US. Those results might be hiding a more complicated picture, and the state of the US consumer will become clearer in the coming weeks when companies including Walmart and Target report their financials. For now, though, companies are highlighting this growing divide between the wealthy and the less affluent. While McDonald's reported same-store sales growth of 3.8% on Wednesday, CEO Chris Kempczinski said the industry continues to see a decline in visits from low-income customers. It's a big focus for McDonald's because low-income customers are more frequent buyers than those in higher income brackets, he said. "This bifurcated consumer base is why we remain cautious about the overall near-term health of the US consumer. In this environment, we will continue to remain agile with respect to our value offerings to ensure the US strengthens its leadership in value and affordability," Kempczinski said. Kempczinski said that reintroducing menu items at the $2.99 price point was essential in improving customer perception of the burger chain's value, especially as lower-income household budgets tighten. Executives at Yum Brands and Chipotle have echoed the same sentiment in recent earnings calls. Both have launched value-driven promotions and limited-time menu offerings to drive foot traffic as quick-service restaurants see fewer customers coming through their doors. Hotels are seeing a similar trend, Booking Holdings' chief financial officer, Ewout Steenbergen, said on an earnings call last week. "We see generally, top end of the US consumer market will be a little stronger, spending more in the 5-star hotel category, spending more on international travel," he said. "We see at the lower end, more careful behavior," the CFO added. "Pressure on the domestic travel, on the lower-star rated hotels, so there is definitely a little bit more of the negative behavior that we see in terms of impact to the US consumer." Consumers are spending, but the devil is in the details Another company that's seeing a consumer split is Uber. Uber's ride-hailing business grew in the late spring, notching a 16% increase in revenue during the company's latest quarter. Two groups of riders appear to be driving that growth. The company cited lifts from both its higher-priced rides, such as its Comfort and Black offerings, and from some options that generally carry cheaper fares, such as its wait-and-save option. "Different parts of our demographic are sensitive to price, and then there are other parts of our demographic who want a premium product," CEO Dara Khosrowshahi said. "So what you're seeing from us is actually a barbell strategy." People also continue to spend on Uber's services, especially for food delivery. The company's delivery revenue rose 20%, beating analysts' expectations in its second-quarter earnings report on Wednesday. "At this point, we're not seeing weakness in the consumer," Khosrowshahi told CNBC on Wednesday. Foot traffic data from and Colliers indicates that while retail visits were up compared to the same period a year earlier, customers favored more affordable brands and experiences — like Chili's, Crunch Fitness, Ollie's Bargain Outlet, and HomeGoods — over bigger-ticket discretionary purchases, like home improvement and electronics. The analysis also found that brands with middle- and upper-income consumers, like Nordstrom, Staples, LA Fitness, and Barnes & Noble, saw the most significant gains in the first half of the year. "This suggests that while value matters, brands don't need the lowest prices to win customers," Colliers' national research manager for retail services, Nicole Larson, wrote about the chains that target more affluent shoppers. "Brands that effectively communicate their value proposition can thrive, no matter the final price point."
Toronto Sun
3 days ago
- Business
- Toronto Sun
McDonald's sees US rebound but says low-income diners remain stressed
SCOTT OLSON/GETTY IMAGES NORTH AMERICA/AFP/File Photo by SCOTT OLSON / GETTY IMAGES NORTH AMERICA/AFP/File NEW YORK — McDonald's profits rose in the second quarter behind a rebound in U.S. sales but executives said Wednesday that low-income consumers remained under economic stress. This advertisement has not loaded yet, but your article continues below. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. SUBSCRIBE TO UNLOCK MORE ARTICLES Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. REGISTER / SIGN IN TO UNLOCK MORE ARTICLES Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account. Share your thoughts and join the conversation in the comments. Enjoy additional articles per month. Get email updates from your favourite authors. THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Don't have an account? Create Account The fast-food chain notched a 2.5 per cent rise in U.S. comparable sales after the same benchmark shrunk by 3.6 per cent in the first quarter. McDonald's chief executive Christopher Kempczinski described the U.S. consumer base as 'bifurcated,' with weakness in low-income consumers a reason for lingering caution on the outlook, he said at the outset of an earnings conference call. Later, in response to an analyst question, Kempczinski said 'real incomes are down' for this population despite higher wages. 'There's a lot of anxiety and unease with that low-income consumer,' Kempczinski said. 'I think we could all speculate the reasons for that, probably tariffs and the impact that might have, be questions around the employment situation.' This advertisement has not loaded yet, but your article continues below. People are either skipping meals like breakfast, 'or they're trading down, either within our menu or they're trading down to eating at home,' he said. In terms of the results, McDonald's reported an 11 per cent rise in profits to $2.3 billion, while revenues increased five percent to $6.7 billion. Global comparable sales increased 3.8 per cent. Executives pointed to strength in Japan, while promotions in Germany for the Chicken Big Mac and France for the Big Arch burger also boosting demand. McDonald's has also unveiled meal promotions in the United States such as the $5 Meal Deal and the Snack Wrap for $2.99. However, executives said they were still working to implement the offering throughout its network. US franchisees have sometimes resisted such promotions because of profit concerns. 'Too often' consumers may drive up to a McDonald's 'and you're seeing combo meals that could be priced over $10 and that absolutely is shaping value perceptions … in a negative way,' Kempczinski said. 'We've got to get that fixed,' he said, adding that the company is holding 'active and productive' conversations with franchisees. Shares of McDonald's jumped three per cent near midday. RECOMMENDED VIDEO Editorial Cartoons World Canada Celebrity Wrestling
Japan Today
3 days ago
- Business
- Japan Today
McDonald's sees U.S. rebound but says low-income diners remain stressed
McDonald's said it is working with franchisees to implement promotions throughout its US network McDonald's profits rose in the second quarter behind a rebound in U.S. sales but executives said Wednesday that low-income consumers remained under economic stress. The fast-food chain notched a 2.5-percent rise in U.S. comparable sales after the same benchmark shrunk by 3.6 percent in the first quarter. McDonald's Chief Executive Christopher Kempczinski described the U.S. consumer base as "bifurcated," with weakness in low-income consumers a reason for lingering caution on the outlook, he said at the outset of an earnings conference call. Later, in response to an analyst question, Kempczinski said "real incomes are down" for this population despite higher wages. "There's a lot of anxiety and unease with that low-income consumer," Kempczinski said. "I think we could all speculate the reasons for that, probably tariffs and the impact that might have, be questions around the employment situation." People are either skipping meals like breakfast, "or they're trading down, either within our menu or they're trading down to eating at home," he said. In terms of the results, McDonald's reported an 11-percent rise in profits to $2.3 billion, while revenues increased five percent to $6.7 billion. Global comparable sales increased 3.8 percent. Executives pointed to strength in Japan, while promotions in Germany for the Chicken Big Mac and France for the Big Arch burger also boosting demand. McDonald's has also unveiled meal promotions in the United States such as the $5 Meal Deal and the Snack Wrap for $2.99. However, executives said they were still working to implement the offering throughout its network. U.S. franchisees have sometimes resisted such promotions because of profit concerns. "Too often" consumers may drive up to a McDonald's "and you're seeing combo meals that could be priced over $10 and that absolutely is shaping value a negative way," Kempczinski said. "We've got to get that fixed," he said, adding that the company is holding "active and productive" conversations with franchisees. © 2025 AFP
