McDonald’s executives have finally acknowledged that their $18 Big Mac meals and other inflated prices are putting off lower-income customers.
“We certainly know consumers are more wary or weary of pricing,” Chief Financial Officer Ian Borden told investors during a Monday earnings call.
The transcript of the conversation, which Business Insider obtained, also revealed that CEO Chris Kempczinski said that McDonald’s customers — especially those making less money — are placing smaller orders than in previous years.
During an October earnings call, company executives told investors that the price increases “largely hadn’t put customers off,” according to the Insider analysis.
According to Borden, menu prices increased by around ten percent in 2022 and again in 2023.
A Big Mac burger, a medium beverage, and a medium fry meal now costs $18 in some locations, up $10 from 2018 when former President Donald Trump was in office, Breitbart News reported in November 2023.
“Where you see the pressure with the U.S. consumer is that low-income consumer,” Kempczinski said during the recent call. “Call it $45,000 and under. That consumer is pressured.”
“From an industry standpoint, we actually saw that cohort decrease in the most recent quarter, particularly, I think, as eating at home has become more affordable.”
Echoing comments he made during the October investor call, the CEO said that McDonald’s was not seeing “any real change in behavior” among middle and upper-class customers.
As for the low-income demographic, the fast-food giant plans to focus on more cheap menu items in the $1-3 range.
“The battleground is certainly with that low-income consumer,” Kempczinski added, saying that increased attention on “affordability” is needed.
After the executives’ comments were made public, McDonald’s shares tumbled by nearly four percent, ABC News reported.