McDonald’s Corp. said low-income consumers in the US are still under pressure, highlighting the struggles of a key customer group for the burger chain.
Across the industry, purchases from low-income guests were down substantially in the fourth quarter, Chief Executive Officer Chris Kempczinski said Monday on a call with analysts following the company’s earnings release.
“The overall market is pretty muted,” he said. The low-income segment makes up a disproportionate share of fast-food customers, including at McDonald’s.
McDonald’s expects the first quarter to be the “low point” this year as the chain emerges from an E. coli outbreak that scared customers and contributed to a US sales decline.
It’s also bracing for a tough consumer-spending backdrop around the world. In the US, McDonald’s launched a new value menu in January in hopes of bringing price-conscious diners in.
“Should the underlying environment improve beyond our initial expectations, especially with respect to lower-income consumers, we would expect to benefit disproportionately relative to our competitors,” Chief Financial Officer Ian Borden told analysts.
Written by: Daniela Sirtori @Bloomberg
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