Posted on 05/03/2024 6:46:20 AM PDT by Red Badger
Economy, other factors have put pressure on consumers
People seem to be buying less food from quick-service restaurants (QSR).
That appears to be the case after companies such as Yum! Brands, Starbucks and McDonald’s offered their latest quarterly updates on their businesses.
In the first quarter, the corporate parent of KFC, Taco Bell and Pizza Hut said its overall same-store sales narrowed by 3%, which was "expected," said Yum! Brands CEO David Gibbs in the company’s press release Wednesday.
CFO Chris Turner told analysts and investors who tuned into the earnings call that Yum! Brands had expected the first quarter to "be our most challenged" in terms of same-store sales "due to prior year lapse, a return to a more normal inflationary environment and discrete consumer demand pressures, including markets impacted by the Middle East conflict."
Of the three major brands owned by Yum! Brands, Pizza Hut and KFC both experienced decreases in same-store sales in the first quarter, at 7% for the pizza chain and 2% for the fried chicken chain. But the same metric at Taco Bell went up 1%, according to the company.
"As far as the international consumer goes, it’s probably more of an emphasis on value than there has been in past quarters," Gibbs said about KFC. "We are seeing the same thing in the U.S."
In the earnings release, he also said Yum! Brands was "encouraged by strong 2-year same-store sales growth and positive momentum exiting the quarter" for its chains.
There was a decrease of 4% in Starbucks’ global comparable store sales for its second quarter. That, the company said Tuesday, was "driven by a 6% decline in comparable transactions, partially offset by a 2% increase in average ticket."
"Headwinds discussed last quarter have continued in a number of key markets; we continue to feel the impact of a more cautious consumer, particularly with our more occasional customer, and a deteriorating economic outlook has weighed on customer traffic and impact felt broadly across the industry," CEO Laxman Narasimhan said. "In the U.S., severe weather impacted both our U.S. and total company comp by nearly 3% during the quarter. The remainder of our challenges were attributable to fewer visits from our more occasional customers."
McDonald’s, known for menu items like the Quarter Pounder and Big Mac, said its first-quarter comparable sales went up 1.9%. In comparison, it showed increases of 3.4% in the prior quarter and 12.6% in 2023’s first quarter.
Chris Kempczinski, the CEO of McDonald’s, said it was "clear that broad-based consumer pressures persist around the world."
"Consumers continue to be even more discriminating with every dollar that they spend as they [face] elevated prices in their day-to-day spending, which is putting pressure on the QSR industry," he said. "It is worth noting the Q1 industry traffic was flat to declining in the U.S., Australia, Canada, Germany, Japan and the U.K. And across almost all major markets, industry traffic is slowing."
Many quick-service restaurants, including McDonald’s, Yum! Brands and Starbucks, have been emphasizing value and deals amid the current economy that has pushed some consumers to prioritize eating at home more to save money.
And some others in the industry, meanwhile, experienced comparable sales growth in their most recently reported quarters. Chipotle and Restaurant Brands International were among them.
Yum! Brands, Starbucks and McDonald’s each have a major global presence, with each having tens of thousands of locations around the world.
$15 for a McDonalds or Wendy’s meal - no thanks - ONLY in an emergency situation.
Fast food costs out the wazoo... it’s poorly made by unsupervised low-skilled workers... and the customer service (by those same unsupervised low-skilled workers) ranges from nonexistent to downright surly.
So it’s hard to understand why fewer folks are signing up for that abuse.
Another report from Captain Obvious!
Service varies. In ‘n’ Out, Culver’s, Chick-Fil-A all have very good service. Wendy’s, Popeye’s, Kentucky Fried Chicken, not so much.
This is actually ok. Back in the 50’s, going out to eat was a rare treat. We are going back to American values of families eating at home. This could be good.
$20.67 to eat at McD? No thanks!
Learned my lesson.
Smiles
Smiles
Notice that there are almost NO families eating at McD anymore. Why not? Who’s got $50 or $100 to for a family garbage lunch? The crows in the parking lot have the right idea so far as financial management is concerned... pay no more than its worth)
Service pretty much tracks meal costs.
I agree with you which is why our fast food options are Chick-fil-A, In-n-Out, and Costco (hot dogs).
Wake me when there are mass closures of coffee kiosks. /s
We went to Wendy’s Tuesday night, right up the street from our home, and got a couple of those ‘Dreamsicle’ shakes they advertise on TV.
Two SMALL shakes, about the size of a small coffee cup, $4.90.
Never going back again.................
“We have food at home.” Literally.
Cutting down on fast foods is a quick and easy way to immediately tighten belts.
Then of course, fast foods are very unhealthy.
No sh!t sherlock. That’s been the story for a few years here. No biggie as we try to go as clean as possible for our food and meat choices.
I see it as almost exclusively a ‘road trip’ food. If I am driving somewhere i will indulge as it is fast and has a well known menu and some consistency. If I’m in my city i’ll typically cook at home or occasionally visit a non chain local place.
$25 w Tip for Fish and Chips at Red Robin.
I am eating at home more often these days because the quality of food being prepared by incompetent chefs at restaurants is bad and overpriced.
I think one by one, they will go to the wayside...and new, small home cooking restaurants will take over in Town after Town. The not so poor can still go to their high priced restaurants.
Eating out too much will tighten your belt, too...............in the wrong direction............
Wendy’s has good salads. Scared to see the cost now.
It’s good to know for road trips. I’ll order it with a small chili. Pretty good. Jack in the Box has good sized salads too.
Road trips are bad on the diet. Too much bread/flour in the burgers are bad for the blood sugar. Drive thru windows and cabernet in the motel room with ESPN on the tube-a good break.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.