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McDonald's sales plunge among low-income diners

Diners are cooking at home more often, citing high costs at restaurants like McDonald's. ©Image Credit: Unsplash / Jenn Causing

Alarm bells are ringing in the fast-food industry as McDonald's is feeling the pinch. The fast-food giant reports sales plunging among its low-income diners, who have been a key market for the chain.

Losing ground to a big rival

A sales drop is bad enough on its own, but McDonald's is also losing ground with its key customer group to one of its biggest rivals: Burger King.

During the last quarter, McDonald's saw a 2.4% drop in year-over-year spending from its low-income guests. This is the first time the chain has recorded a drop in sales from households making $40,000 or less.

The big question is whether it's a one-off or whether McDonald's is acting like the canary in the coal mine.

Burger King's numbers may answer the question, as it recorded a 0.3% year-over-year increase in spending during the same period.

This data hasn't gone unnoticed by McDonald's, which is pinning the drop on its value menu. The menu offered items for $3 or less, but failed to hit the mark as effectively as past campaigns.

"Although we've restored our overall value and affordability leadership, our restaurant-level results show that execution was inconsistent across the system," said Chris Kempczinski, CEO of McDonald's.

Higher costs keeping customers away

There's no mystery from the diners' point of view, as Business Insider spoke to many who said they were cooking at home more often because it was more affordable, or choosing other chains.

The data shows that despite its incredible brand awareness and name recognition, McDonald's is struggling to attract diners.

The Golden Arches are working to turn things around

If you're part of the group who wasn't thrilled with the latest deals and promos at McDonald's, then you're probably interested in seeing what the chain is going to do to turn things around.

Source: Business Insider, Yahoo!Finance

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