Due to the war in Iran: McDonald’s is losing customers
9 May 16:03
The rise in fuel prices linked to the war in Iran is hitting low-income consumers disproportionately hard, forcing them to cut back on orders at McDonald’s. Reuters reports this, citing the company’s CEO Chris Kempczinski, according to "Komersant Ukrainian".
McDonald’s, like several other fast-food chains, relies heavily on low-income consumers and offers special deals to attract more visitors with limited financial means.
“Rising fuel prices are the main problem we are currently seeing. I think it’s probably fair to say… (the macroeconomic environment) is definitely not improving and may even be getting a little worse,” Kempchinski said at a conference on the company’s financial results.
Margins are also falling as the company spends more on ingredients, paper, and fuel due to inflation. Specifically, U.S. results fell 25% to $59 million compared to last year.
Several other U.S. restaurant chains, such as Shake Shack, Papa John’s, Wingstop, and Domino’s, have also reported weaker quarterly sales growth, citing the impact of the war in Iran.
Kempchinski adds that the company may review its franchise network to improve results.
At the same time, the company’s total revenue of $6.52 billion exceeded previous forecasts of $6.47 billion, even though sales growth fell short of expectations.
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