Sarah Foss’ Post

McDonald’s CEO, Chris Kempczinski, addresses the recent challenges faced by the global fast-food chain as it experiences a decline in sales after over three years. The shift is primarily attributed to low-income consumers opting for cost-effective dining alternatives amidst prevailing economic challenges. Sales in international developmental markets have notably decreased by 1.3 percent, reflecting changing consumer sentiments in regions like China and the Middle East. This decline underscores a significant shift towards more economical dining choices. Despite McDonald's reputation as a best-value fast-food chain, the "value leadership gap" with competitors has narrowed, showcasing the evolving preferences and behaviors of consumers seeking ways to save money during uncertain times. Key Highlights: - Loss of low-income consumers impacting sales - Consumers opting to eat at home and explore cost-effective dining options #McDonalds #SalesDecline #ConsumerBehavior #EconomicChallenges https://lnkd.in/gCRsP6n7

I always tell myself "I'll go Maccies for lunch and have a salad or a grilled chicken wrap" before crying 15 mins later on the A50 after I've smashed out a large Big Mac meal & double cheeseburger. Maccies saw a positive impact on their overall sales, including burger sales, when they introduced salads and other healthier options to their menu. It attracted a set of new healthier customers and buyers like me who love the illusion of choice. If you want to be dancing like my man below and you sell any products online, you need to make sure at checkout you're offering multiple delivery options. We all like free/cheap delivery, but if I'm in Aus and I can choose a free 8-13 day postal option or an Express 2-4 day for $20 - My chimp brain is getting my goods faster and leaving me arguing with my Mrs about my spending later. Choice is king 👑 Squeeze those extra sales! #Ecommerce #Retailers #InternationalGrowth

Is this just a blip? Another difficult to theorise event, easily pointed towards brexit, cost of living, war, competition etc etc. Or are McDonalds actually slipping or perhaps aghast! doing something wrong? #food #qsr #foodservice #fastfood #restaurant #cafe #takeaway #burger #foodblog #chef #hospitality #catering #mcdonalds #burgerking https://lnkd.in/eBzPpHqy

With consumers becoming more and more cost sensitive, the right pricing strategy will be key to the success of a healthy P&L for any restaurant chain. After a couple of years with tremendous inflationary pressure hitting the bottom line, it will be tricky to find the sweet spot between pricing aggressivity, traffic and healthy COS.

#PROFOUND # #Extraordinary #Brilliant #Healthy #SavingPower #MoneyInTheBank #Amazing #RidiculousSaving # #Unforgettable '15 Aldi Shopping Secrets Only Die-Hard" 1. You can find extraordinary deals on baked goods. 2. Aldi always has the best prices on produce. 3. The best time to shop is Wednesday mornings. 4. Avoid the toiletries aisle. 5. Aldi's refund policy is better than any other grocer's. 6. You can use Checkout51 to get cash back on your purchases. 7. Check Reddit for product reviews. 8. You need to act on the Hot Deals quickly. 9. You should always check Aldi's website for weekly specials. 10. Always opt for the store-brand product when possible. 11. You'll want to try all of Aldi's gluten-free products. 12. Always ask a manager if something is on sale. 13. It's fine to pick up an empty box to stash your groceries in. 14. Their wines are totally worth it. 15.Their customer service is truly unmatched.

Great article by Jonathan Maze + Restaurant Business Online 👏 "McDonald’s same-store sales declined 0.7% in the second quarter, the company said on Monday, as consumers frustrated by higher prices cut back on their visits to fast-food chains. Global results weren’t much better, as economic and geopolitical issues contributed to sales declines in key markets around the world. Systemwide, same-store sales declined 1% in the quarter ended June 30. It was the worst top-line performance for the Chicago-based fast-food giant since the second quarter of 2020, when a global pandemic shut down restaurants worldwide. In the U.S., it was the first time same-store sales declined in 16 quarters." Interesting to see consumer behavior shifting. Do you think this trend will continue? 📉 https://lnkd.in/eV8saxqu

At Outsider B2B, our ideal client profile doesn't include fast food chains, but we do love pizza. So when we saw the story about MOD Pizza, which recently changed its pricing structure, it naturally caught our attention. 🍕 In short, MOD Pizza moved from a single price point per size, independent of toppings, to a three tier pricing model (no topping / one topping / unlimited toppings). The chances are that you're not in the pizza business, but in SaaS or B2B service. However, the key message here stays the same: your organization's pricing strategy is instrumental to optimize your market positioning, competitive edge, your revenue and profitability. At Outsider B2B we provide outside perspectives of our clients pricing model vs the market and help them to optimize their pricing strategy - helping them break through previous revenue ceilings. https://lnkd.in/gjUuFa5f #pricing #pizza #saas #b2b

While this article compares Walmart to McDonalds, it’s generally true for most grocers compared to most restaurants. Folks are eating out less often due to inflation, and are preparing more meals at home. Grocers have responded by introducing more generic and private label CPG brands to keep prices low. Restaurants need to add value to their menus in order to retain guests. Every day menu pricing needs to incorporate specials which will increase perceived value, particularly for families with young children and seniors.

I came across a fascinating article today discussing why Pret A Manger has decided to end its £30-a-month coffee subscription. For those who might not know, Pret launched this subscription service in the UK four years ago as the country was emerging from the pandemic. At that time, Pret’s executives must have been pondering a critical question that every director should consider: where in the business do we make our money? Pret’s answer was: shop visitors. However, comparing the number of visitors pre- and post-pandemic, there simply weren’t enough people coming through the doors. The coffee subscription was their solution to increase foot traffic. It offered up to five hot drinks a day, and subscribers visited Pret an average of 28 times a month. This means an average subscriber was spending about £1 a day on potentially five drinks, equating to around 20p per beverage. To break even, Pret needed each beverage to generate £2.70 on average. Even if the average subscriber consumed only one hot beverage a day, it still resulted in a loss of £1.70 per drink. Therefore, it’s unsurprising that the subscription had to end. But where did Pret go wrong? In my view, they addressed the wrong problem. They succeeded in getting people through the door but overlooked the crucial question of where they make their money and how to maximize that revenue stream. As it turns out, Pret’s profitability lies in selling coffee. Who would have guessed? #Coffee #Revenue #Growth

Another trend I am seeing that has gone full circle and that we should expect to see across most industries - The Unhappy Meal If you know me, you know I can crush a Big Mac every now and then. You expect many things from fast food — good and bad — but being expensive isn’t one of them. Over the past few years, that’s exactly what it has become, a point the industry’s most well-known brand just acknowledged and now all fast food restaurants are delivering a "value box/meal/package". I know you see these commercials. McDonald's said its prices have gotten too high during a tough earnings report that fell short of analysts’ expectations, writes Business Insider’s Grace Dean. The chain’s same-store sales dropped 1% this quarter, its first decrease in the category since 2020. McDonald's CEO Chris Kempczinski told investors part of the issue was the company underperforming on “our value execution.” A trend we all saw over the past few years that is coming to roost. They saw an opportunity to squeeze out higher margins, neglecting the customer. Sound familiar? The Golden Arches isn’t alone in its struggle. Nation wide prices have been a victim of inflation, and customers have had enough. You are seeing it in the market fluctuation and in the latest earning calls. Some executives have gloomy outlooks as they feel a real pullback from their typical users. Sit-down restaurants picked up more business as the gap in prices narrowed. But ultimately, plenty of users are opting to just eat at home. Coca-Cola, for example, said a drop in dining out hurt its sales. With such a pessimistic outlook, you’d think McDonald’s stock would be tanking…but it’s not. The fast-food chain’s shares finished Monday up more than 3.7%, largely thanks to a pledge to focus on value going forward, writes BI’s Kelly Cloonan. That includes continuing its $5 meal deal, which launched in late June and is already considered a success. Leaning into low-cost offerings might be restaurants’ best bet to turn the tides for customers and get investors on their side. But put a different way, they got back to what people know and love about them. A wake up call for all. Dominos, for example, saw its carryout sales growth (7.9%) far outstrip delivery sales growth (2.7%) in the second quarter. The pizza chain’s CEO, Russell Weiner, told BI’s Alex Bitter it’s partially driven by cost-conscious customers looking to save on delivery fees and tips that can quickly rack up. Despite improving economic data, McDonald’s execs weren’t optimistic about consumers opening their wallets anytime soon. That could mean chains keep tweaking their business to meet consumers where they are. Which is the point of it all, right? I think the overall lesson is do what customers expect and love about you first, then look to grow. Seems simple but we are all victims of it. Focus, focus, focus.