McDonald’s reported a one percent decline in quarterly earnings during a call with investors on Monday morning, marking the first global drop in sales per store since the fourth quarter of 2020. Leaders within the company are aware that higher prices have been scaring customers away, and are already pivoting towards value strategies to lure them back.
“Consumers still recognize us as the value leader versus our key competitors, it’s clear that our value leadership gap has recently shrunk,” said McDonald’s global chairman, president, and CEO Chris Kempczinski during the call, according to ABC News. “We are working to fix that with pace.”
In addition to same-stores sales losses, McDonald’s also failed to meet Wall Street expectations. The company was projected to pull in $6.61 billion in revenue, but earned just $6.49 billion in the quarter ending on June 30. Per-share earnings were also reported at $2.80, adjusted to $2.97, which fell far below the per-share profit of $3.07 that industry analysts had predicted.
Though the $5 value meal has proven to be successful for McDonald’s, it was rolled out just days before the end of the second quarter. Last month, it was reported that 93 percent of franchisee owners voted to extend the popular meal deal—which comes with a choice of a McChicken or McDouble, a four-piece Chicken McNuggets, small fries, and a soft drink—through August.
“At the end of the day, we expect customers will continue to feel the pinch of the economy and a higher cost of living for at least the next several quarters in this very competitive landscape,” added McDonald’s U.S. President Joe Erlinger, per NBC News. “So we believe it is critical for us to consider these factors in order to grow market share, and return to sustainable guest count-led growth for the brand.”