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.
Heheh. It sure will.
One major thoroughfare in our area has all the fast food and chain restaurants on it.
We counted 6 Mexican style restaurants and it’s only about two miles long.......
I haven’t participated in the fast food realm but maybe a handful of times in 20 years.
I can cook a good meal at home ,three people $10.00.
Have leftovers for lunch or $45.00 for fast food that’s trying to kill us.
I remember when almost all the fast food places practically to the day came out with the almost meat sandwiches. Chemicals, no thanks
15$ can buy two rottisserie chickens at a grocery store, and a loaf of bread and mayo— covering sandwiches for 2 for a week.
So far, anyway. Check out prices of so called ready-made microwave meals... ridiculous. Apparently no one knows how to cook, which is no surprising.
You’re correct about surly (and dirty looking with no hair nets over their dreadlocks— yuck) service. One noticeable exception recently was a 5.29 double STEAK burger with cheese and small fries, cooked to order at Steak an Shake. Steak and Shake owned by an Iranian American who buys and sells real US steak in their burgers. Not mcdonalds veggie squeeze loaf.
This is my afternoon snack...have done it for years.
Rotisserie chicken = chicken shawarma...not traditional, but yummy as hell.
I got a text from a friend who ate at MacDonald’s every morning for breakfast for years - he said the usual breakfast he gets - Egg McMuffin, hash browns and coffee is now over $11.00. Yesterday was his last day for his breakfast routine. I suspect he is not alone.
I know in my own family, eating out is now a rare treat, reserved for birthday or special celebrations, and not a once or twice-a-week activity as it was before, it’s simply become too expensive.
Just put on a pot roast for dinner tonight...
My “meal” at McDonald’s comes to about $7 or so, a bit under I think. I get either the chicken deluxe for about $5.50 or so I thunk it is, and maybe small fry, or I get 2 plain basic cheeseburgers for around same price.
I always bring my own soda, which I buy on sale for about $.50 a can (back during Bush presidency, I would get them on-sale for $.25 a can- those days are long gone)- I have 2 freeze can holders which keep soda super cold, and just eat In The car to avoid the crowds inside the business.
But, I don’t/can’t eat out often- and definately can’t eat out at higher end resteraunts- heck, even going to Kentucky fried store is now way too expensive. Stopped there once awhile,back ordered 2 pieces of chicken, some fries, and a small soda, and the teller said “$22 dollars please” I said “seriosuly”? Zhe answered “I know, but there is a shortage on chicken right now” which I didn’t beleive as prices have remained pretty high ever since-
I said to her “cancel my order”, and drove to a supermarket and bought a whole chicken, cooked, for $6.00
Gotta be a Rockefeller the se days to eat out.
We were laughing at old menu prices not too long ago that were posted on the wall of a very old local restaurant. I asked my elderly relative if she remembered those types of prices.
She told me eating out was not even thought of when she was growing up, that was for “rich” people and her father didn’t have that kind of money.
Our local Wendy’s though I always get sick- nausea and the runs- tried eating at a few different ones, and they all caused it. Tried several times thi king perhaps it was just a fluke, but nope- I used to be able to eat there fine back in the day.
Spit is gluten and calorie-free.
We,avoid going out to higher end because of how they smother everything in spices, and use pretty heavy garlic on many things- neither of which we like. We just grew up eating bland farm raised meat and veggies- and enjoy that taste far better than heavily spices/seasoned tastes I guess
High pric and low quality- let’s see how long it takes for the MBAs at. McKinsey to break this code.
Had anybody been to Freddy’s Frozen Custard & Steakburgers? Are they anything like Culvers?
Fast food can be tasty and convenient, but when it’s not one or the other, and the nutrition and price are added factors, it becomes difficult to justify the experience.
It used to be affordable, and you ignored the nutrition part, because you also got the taste and convenience.
I am reminded of the old movie DIVORCE: AMERICAN STYLE(1957) in which Dick Van Dyke orders and receives from McDonald’s ....”A double meat cheeseburger, fries and a coke. That will be 57 cents sir.”
In California at that!
I haven’t eaten out in months. No more unless, as you say, in an emergency situation.
When I was a teenager in 1972, a WHOPPER was 59 cents.
And I thought that was outrageous!..................
When I was a teenager in 1972, a WHOPPER was 59 cents.
And I thought that was outrageous!..................
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