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McDonald's is losing customers to inflation

MARY LOUISE KELLY, HOST:

McDonald's is selling fewer burgers for the first time since the pandemic shutdowns. One reason - high prices are keeping more people eating at home. NPR's Alina Selyukh reports.

ALINA SELYUKH, BYLINE: Much of McDonald's future hinges on the success of this new offer.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PERSON: Looking for a reason to try the new $5 meal deal at McDonald's?

SELYUKH: It's the return of the value meal, an attempt to slow down a big shift happening across the country. People are scaling back on going out to eat because of inflation. Prices at restaurants keep rising faster than at the grocery store. In fact, some grocery prices are declining, while a fast food dinner is double digits. And that's changing the math for key McDonald's customers, families and folks with lower incomes, says CEO Chris Kempczinski.

CHRIS KEMPCZINSKI: In many cases, they're dropping out of the market, eating at home and finding other ways to economize, cutting down on trips.

SELYUKH: For a while, McDonald's benefited a lot from people trading down, choosing to go there instead of maybe Chipotle or Pinera, somewhere more expensive. That's still happening.

KEMPCZINSKI: But it's just not enough to offset the pressure that we're seeing on that low-income consumer.

SELYUKH: McDonald's sales fell almost 1% in the U.S. between April and June. It's the first decline since 2020, when the pandemic shut down restaurants. So the chain is trying to get people to think of it once again as a bargain, which includes a marketing push for deals.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PERSON: Don't think of it as Friday. Think of it as free fries Friday.

SELYUKH: This deal for app users in hopes that free fries turn more people into McDonald's loyalty members. And the $5 value meal is now staying on longer through the summer. Executives say it's early signs show people do come in more to buy the deal, and many order extra items on top. Alina Selyukh, NPR News. Transcript provided by NPR, Copyright NPR.

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Alina Selyukh is a business correspondent at NPR, where she follows the path of the retail and tech industries, tracking how America's biggest companies are influencing the way we spend our time, money, and energy.