Capital Economy, Business and Finance
Three years ago the world woke up after covid and headed to McDonald’s. The fast-food chain reported a 41 per cent sales increase in the second quarter of 2021. But the company said yesterday that global sales had dropped for the first time since the pandemic, falling 1 per cent year on year in the three months to June, as people cut back on Big Macs after years of price rises and tight budgets. Net profit fell 12 per cent to $2.02 billion. McDonald’s, which has increased the cost of a Big Mac by 21 per cent in the US since 2019, launched a $5 meal deal in June to try to bring customers back to its tables. Company executives said this was selling better than expected and franchises could extend the deal past August, which sent shares up four per cent. But CEO Chris Kempczinski acknowledged that the company’s “value leadership gap” had shrunk. Translation: expect more meal deals as fast food chains enter a value war.
