McDonald’s Grapples with Sales Slump and Consumer Backlash Amid Price Hikes and Boycotts

McDonald’s is reexamining its pricing strategy after experiencing a 1% drop in sales from April to June, the first decrease since the pandemic began. The decline in sales at stores open for at least a year has been attributed to customers cutting back on spending and a response to price increases implemented during the pandemic.

Despite McDonald’s efforts to mitigate the situation with discounts and promotions, including a $5 meal deal in the US and a £3 campaign in the UK, the company has not been able to reverse the downturn. CEO Chris Kempczinski has announced a comprehensive review of the company’s pricing strategy, which includes extending recent promotions and collaborating with franchisees on additional value-focused initiatives.

The company’s shares saw a rise of over 3% following the announcement, with Kempczinski expressing confidence in McDonald’s ability to adapt and address the challenges. The company has faced backlash due to significant price hikes during the pandemic, with the average price of a Big Mac in the US increasing by 21% since 2019.

Despite attempts to reassure customers, McDonald’s has struggled with a decline in demand, particularly among lower-income consumers who have been hit hardest by inflation. The brand has also faced challenges in international markets, including France and China, where price wars and boycott calls related to the Israel-Gaza conflict have further impacted sales.