McDonald's and other food giants hit hard by inflation

Let’s see. McDonald’s sales and income both grew this quarter. Net income was nearly $2B. That’s $2B, after costs, that consumers don’t have in their pockets, but investors and executives have in theirs. I find it impossible to call this “hit hard,” and even harder to keep a straight face when these megacorps think they have a right (or that it’s even fundamentally possible) to grow the rate of profit growth forever.

Turns out when you take $2B from consumers and put it into investor’s pockets, less money is available to spend on consumer goods next month. Who woulda thunk.

I’m not a McDonalds customer generally. I visited one at the weekend as was with some other people and it was a convenient stop on a road trip.

Last time I went to a McDonald’s a long time ago it was a fast smooth experience. Walk up to counter, give my order, transaction completed in less than a minute.

The McDonalds yesterday, no obvious point of sales counter. They were a bunch of large touch screens. The first one I tried took me to the first UX screen with best sellers, then it froze, it would no longer register touch. It could have been wet fingers from the rain or it could just be broke.

I move to the screen next to it to try, that didn’t work at all. I looked around and see a third screen on the other side, I walk over, that worked. I then had to navigate a bunch of menus searching for what I wanted, then I get asked if want to make it a meal or some other upsell searching for the no button before confirming adding to cart. Then I needed to navigate to the checkout only to be presented another upsell again trying to find the no I just want to pay option.

After finally paying it briefly showed a number on the screen I wasn’t paying attention for expecting the paper copy from the printer on the machine. I got no paper copy as the machine was out of paper.

For a fast food company it felt like a hassle / hard work ordering.

They’ve cut all their front of house staff for some touch screens to save paying a few minimum wage workers.

With less staff operating it also felt dirty and run down. Last time I went to McDonalds you could depend on it being cheap, fast, clean and reliable. It didn’t feel like any of them anymore

No no, the decrease in sales couldn't possibly be related to the above-inflation increase in prices at fast food places. It must be those pesky consumers and their want to "spend frugally"!

This isn't particularly coherent, and is basically a lengthy series of links to other stories, with some quotes extracted. The top of page clearly states "We may earn a commission from links on this page.".

Fast food restaurants have priced their food into “real food” territory. Spend $10 for a combo at McDonald’s or get an authentic burrito from a local eatery? Folks are thinking twice about the drive thru.

McDonald's (and other fast food giants) hit hard by inflation? I thought they were the hard hitting inflation.

I think there have been two major drivers to inflation in fast food: - wages - delivery apps

Wages is pretty obvious, and the article cited the changes in California. It is important to keep in mind that we’ve seen wages jump in the golden state 66% for fast food workers since 2019. That’s huge, especially since labor it’s the largest cost for these restaurants.

Delivery apps added a new fee that showed consumers weren’t as price sensitive as they thought. So I think we’re seeing some increases related to that.

They've been losing out to cheaper food competitors. Per latest news sounds like they realize they need to provide better value and lower price.

But other companies have no interest in lowering prices and say so in their quarterly reporting. Think Tapestry was one recently.