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McDonald’s dining rooms and drive-thrus remained a little light in the third quarter, officials with the mega fast-food restaurant chain said during a recent earnings call.
CEO Chris Kempczinski noted that consumers, especially lower-income customers, chose to eat at home more often, continuing a trend from the previous quarter.
“QSR [quick-service restaurant] traffic has remained pressured, reflecting industry-wide challenges,” he told analysts. “And while we anticipated a challenging environment in 2024, our performance so far this year has fallen short of our expectations.”
Q3 net income decreased 3% to roughly $2.3 billion, according to an earnings release. Comparable sales decreased 1.5% globally, but inched up by 0.3% in the US.
Kempczinski also cautioned that McDonald’s “value leadership gap”—the way it measures its spot as a “value leader” among customers versus the competition—has gotten smaller. “In response, we have moved with urgency in partnership with our franchisees to improve our value offerings in most of our major markets,” he said. McDonald’s did this in Q3 through cheaper Happy Meals in France, a three-item deal in the UK, and CAD$1 coffee in Canada.
CFO Ian Borden also hinted at a new “holistic US value platform” that McDonald’s will introduce in Q1 2025.
QPConundrum. It remains to be seen whether the recent E. coli outbreak tied to the onions McDonald’s used in its iconic Quarter Pounder burgers will weaken sales in future…quarters. But Kempczinski addressed the issue with investors.
The company “swiftly” ceased sourcing from the Colorado facility tied to the outbreak and stopped doing business with it “indefinitely,” he said. Regulators confirmed this weekend they did not detect contamination in the Quarter Pounder beef patties, and with a fresh supply of patties on the way, “we expect all restaurants in the US to resume the sale of Quarter Pounders in the coming week,” Kempczinski said.
Daily sales and customer traffic in Mickey D’s restaurants have been down since the incident, according to QSR magazine.