McDonald's is losing ground to rivals among low-income fast-food diners, according to recent data.
Spending by low-income guests at the Golden Arches declined 2.4% year-over-year during the company's latest quarter, said consumer analytics company Numerator. The firm defines "low-income guests" as those from households making $40,000 or less a year.
The drop is McDonald's first quarterly decline with low-income guests in the past year and amounts to roughly $310 million in lost sales, Numerator said on Tuesday.
Rival fast-food chain Burger King, meanwhile, notched a 0.3% gain over the same period.
The data is the latest sign that McDonald's is struggling to attract diners, especially in a K-shaped economy.
While the chain long won over price-conscious diners with deals like its buy-one-get-one discount on sandwiches such as the Big Mac, it has had issues rolling out its latest value menu, which focuses on items priced $3 or less, CEO Chris Kempczinski said on an earnings call earlier this month.
"Although we've restored our overall value and affordability leadership, our restaurant-level results show that execution was inconsistent across the system," Kempczinski said.
McDonald's comparable US sales growth slowed to 0.8% during its second quarter, the company said. Rivals from Burger King to casual dining chain Chili's have posted stronger results while offering their own value menus and deals, Business Insider has reported.
Some McDonald's customers have told Business Insider they're now eating more at other chains or cooking more at home, due to higher costs.
Despite the company's struggles, some McDonald's offers are still drawing in diners of all income levels, Numerator found.
The chain's fried apple pie, an old menu item it brought back for America's 250th birthday this summer, has been purchased by 11.7% of US households, Numerator said.
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Alex Bitter is a senior retail reporter covering the gig economy, food, and retail. His work focuses major gig delivery and ride-hailing apps, including Uber, Lyft, DoorDash, Instacart, and Walmart's Spark. He is interested in everything from what it's like to work on the apps to the companies' business strategies.Some of his recent stories feature gig workers who have been deactivated on the apps, DoorDash hiring traditional employees to make deliveries, gig workers' use of bots, and gig work expanding into new professions, such as nursing.Alex has also written about Aldi's US expansion, Starbucks' turnaround efforts, and the fallout from Kraft-Heinz's budget cutting. Convenience store chain Sheetz ended its "smile policy" after his reporting.Before joining Insider in September 2020, he wrote about consumer and retail companies for S&P Global Market Intelligence. He's a graduate of the University of Hawai'i at Mānoa and grew up on the Big Island.Alex lives in the Washington, DC, area, where you can find him studying ancient coins or searching for Civil War artifacts with his metal detector in his free time.Got a tip? Reach out at [email protected] or via encrypted messaging app Signal at +1 (808) 854-4501.
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