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Americans cut back on fast-food throughout 2024, but particularly in August amongst lower-end consumers.
McDonald’s, KFC, and Starbucks were amongst many fast-food companies reporting earning losses in August 2024, according to Business Insider. Comparable sales at McDonald’s fell 0.7% in the quarter year-over-year. In the same quarter in 2023, the giant saw a 10.3% growth, suggesting that millions of Americans may be cutting back on their fast-food purchases.
At least one expert suggested this may be due to a return to pre-COVID consumer trends. Many chains saw sales erupt during the pandemic. Business Insider noted that many people are simply penny-pinching right now too. (TAKE A POLL: Is It Necessary To Increase Funding For Veterans’ Services?)
What Is Really Happening?
“”The low-end consumer has continued to feel pressure and that’s been going on for more than a year now,” Jeffries restaurant analyst Andy Barish told the outlet. (TAKE A POLL: Is the Two-Party System Beneficial for American Democracy?)
“What’s unusual is that you get a couple of the big players like McDonald’s and Starbucks that are having negative traffic right now,” he continued. “And that’s something we don’t typically see even in these kind of environments where those brands would be typically gaining share.”
The cost of fast-food has almost reached the same level as fast-casual restaurants, which higher income earners are typically going to favor. As the prices are so similar, those higher-income earners are not willing to trade down to fast-food. What consumers really want right now is “value,” said Restaurant Brands International CEO Joshua Kobza (the company owns Burger King, Popeyes, Tim Hortons, and Firehouse Subs).
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