McDonald’s has suffered a drop in sales for the first time since the pandemic as customers shun more expensive Big Macs.
The fast food chain reported a 1pc fall in global sales in the three months to the end of June – the first decline since the end of 2020, when stores were closed during lockdown.
The price of a Big Mac has surged by around 60pc since 2020 from £2.99 to £4.69, while a Happy Meal now costs £3.59 compared to £2.99 four years ago.
Chris Kempczinski, the chief executive of McDonald’s, said consumers were “more discriminating” with their spending as the cost of living crisis continues to hit household budgets.
McDonald’s has previously warned that customers were seeking better value and affordability amid rapidly rising prices.
The chain has introduced a number of discounts in a bid to win over budget-conscious customers after years of price hikes.
A new $5 (£3.90) meal deal, which was launched at US restaurants last month, will be extended until August.
Major restructuring plan
Bosses also pointed to the success of the chain’s loyalty programme, which offers points to regular customers that can be redeemed against future purchases.
Loyalty members accounted for nearly $7bn in digital sales across 50 markets over the quarter – up from $6bn in the previous three months.
McDonald’s reported overall revenues of just under $6.5bn, an increase of 1pc as price rises offset the declining sales.
However, profits dropped by 12pc to $2bn, driven in part by costs linked to a major restructuring plan that has seen hundreds of corporate staff laid off. Excluding these costs, operating profit fell 6pc.
McDonald’s also reported weaker trading in international markets including France, China and the Middle East.
The business has been hit by boycotts in the Middle East amid claims the fast food chain supports Israel in the war in Gaza.
In April, the company bought back hundreds of its franchise restaurants in Israel following a slump in sales.
McDonald’s has said it has no position on the war and is not responsible for the actions of its franchisees, while Mr Kempczinski has described the accusations as “misinformation”.