McDonald’s CEO says consumers are starting to ‘pick back’ on higher burger prices

You know the economic storm clouds gather whenever McDonald’s becomes unaffordable for the working poor consumer base.

CNBC reports that McDonald’s CEO Chris Kempczinski said consumers are starting to push back (in some regional markets) against higher prices and are ordering fewer menu items.

A $9 burger might not be in everyone’s budget.

McDonald’s diners push back against price hikes in some markets: CEO

Paying $9 for a dollar meal burger is the last straw?

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Kempczinski said consumer resistance to higher prices has come to “flip the script” on the models he uses to determine prices.

“When we execute where we know we have pricing power, we do pretty well, but what we find as we try to price in areas that are maybe a little bit more sensitive, the consumer rejects it,” he said. .

Additionally, Kempczinski said customers are less likely to add extras to their orders and items per transaction have dropped into the low single digits.

Kempczinski’s comments come as consumer confidence fell in April as macroeconomic headwinds mount. Consumers have suffered 24 months of negative real wage growth as inflation crushes households.

About 70% of Americans admitted in a recent CNBC poll to feeling financially stressed by inflation and a lack of savings. Many consumers have maxed out their credit cards, while some are starting to miss payments. There is also an increase in housing foreclosures, which points to a rapidly deteriorating consumer base. Remember, a growing number of people can’t afford the $1,000 monthly auto payment.

The first report of consumers trading items at McDonald’s was nearly a year ago (read: “State of US Consumers: McDonald’s Customers Trade Down, Buy Value Items as Combinations Increasingly Unaffordable”), and this is a period when consumers were still ready. love checks and other government aid. Now it’s gone, and some consumers are already switching from fast food restaurants to “Dollar Tree Dinners.”

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