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.
FAKE NEWS - We had people here who said that if all food joints (fast and sit-down) doubled their prices, there would be NO EFFECT on business, as no one would have the option of dining for less, so they’ll accept the prices.
So I’m not fooled!
Wall Street says no...................
non chain is the name of the game
We rarely eat out, and when we do we rate the establishment based on employee and building cleanliness as well as food quality. One of the best we’ve discovered is Culvers. The worst, one we will no longer go to, is McDonalds. We’ve discovered Wendy’s uses fake meat, it’s no longer on the to-go-to list.
Our Culvers, which is fairly new, serve burned flattened squished burgers and raw fish sandwiches.
Horrible place....................
Have y’all walked into a fast food place of late and observed the .......”servers”? Especially SBucks? Only Chic-filA has normal looking servers and that company supports grooming. So, forget it.
>> our fast food options are Chick-fil-A, In-n-Out, and Costco (hot dogs)
In-n-Out is a notable exception. Never had a bad meal there and the customer service is great! I think it’s because they pay attention to management and enforce high expectations of their employees.
I hear Chick-fil-A is the same, but I’m a burger guy. ;-)
Who can afford it anymore. In Biden’s “best economy evuh’” everything is crazy expensive.
The only bad In-N-Out I’ve ever been to was in Medford, Oregon. We all got sick from the food!
It was a long time before I went to an In-N-Out again but will say the bad experience was both memorable and isolated to this one restaurant.
Upside of the experience was I had no problem losing ten pounds.
Apple Pecan Salad, Taco Salad, Large Frosty = $20.20
This has been mine and the Mrs regular order IF I pick up dinner.
I know this because I bought that Weds night on the way home from work.
This was $17 & change up until a few months ago.
Thank you. Been to Culvers a few times but never been to Freddy’s. Freddy’s is over twice as far away from me as Culvers is.
$11 for breakfast is a stunner. I’m sooo glad we make our meals at home, with very little of pre-prepared or processed foods in them. As you said, eating out now is a rarity, a special treat.
I like your idea of pot roast. I need to make one again soon, so I’ll put that on the menu sometime next week. I know I have one in the freezer somewhere. It’s been pushed to the back I’m sure.
Last night I made corned beef and cabbage again. When they were on sale around St. Patrick’s Day, I bought two, and made the first one on the 17th. The use by date is in a couple of weeks, so that was a nice easy meal. Pretty yummy, too. Enjoy your roast tonight. Nothing says comfort like a nice pot roast!
If I want a burger I buy some at Costco and cook them on my George Foreman grill ,LOL
Our local Wendy’s operators are crooked as a snake.
When Wendy’s mailed out a bunch of coupons last year with a special on Frosties, suddenly all the machines at the three Wendy’s were ‘broken’. For a month....
Then when the special was over, they suddenly worked again...............
and a third larger than the current version.
No mention here of California’s $20/hr. wage for fast food workers. Prices were going up nationwide beforehand but this doesn’t help. Think democrats would reconsider? They double down.
They sacrificed quality ingredients to gain short-term profit, but it was a bad gamble.
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