McDonald’s has been pushing restaurant operators to stay focused on value as part of an effort to turn around sliding guest counts. In a memo sent to operators following its third quarter earnings report, McDonald’s U.S. President Joe Erlinger indicated that the company’s emphasis on value over the past year has it “moving in the right direction,” according to CNBC on Thursday (Nov. 6), which cited a copy of the memo.
McDonald’s did not respond to Mid Breaker’s request for comment in time for publication. The company’s U.S. same-store sales were stronger than expected in the third quarter, based on the report. Let’s eat: According to CNBC, the company attributed the increase to it introducing meals and such things as a $2.99 Snack Wrap.
However, McDonald’s also posted earnings per share and revenue that fell short of Wall Street estimates, the report said. The comp guest count was up, however the overall guest count remained down,” Erlinger said in his memo, according to the report. This fact “emphasizes the importance of disciplined pricing, value, and affordability,” he added, according to the report.
In a separate memo to global operators, McDonald’s CEO Chris Kempczinski also said the brand plans to continue “sharpening value leadership to meet evolving consumer expectations and carry strategic actions that increase traffic,” according to the report.
Younger consumers were spending less on meals out at restaurants in October because of challenges they continue to face in the labor market, it was reported earlier this month.
The fast-casual restaurant chains Chipotle and Shake Shack said during earnings calls that the industry was feeling it as these diners pulled back on spending.
In August, there were reports that American restaurant chains were experiencing dropping sales as people stayed away. At the time, I.H.O.P.- and Applebee ’s-parent Dine Brands, Sweetgreen, Wendy’s and Denny’s all said on earnings calls that a reluctance among consumers to spend was holding sales back.
In August, it was also reported that fast food chains were experiencing a drop in breakfast business as Americans pulled back on spending.
The breakfast business of those companies was doing worse than at other times of the day, even though they offered discounts to help draw traffic in for that period and one noted that when the economy becomes more uncertain, breakfast is typically one of the first meals consumers decide to eat at home.
