McDonald's worries about losing low-income customers: Is price the reason why?

Brian from Mount Roskill

Fast food giant McDonald's is worried about losing lower-income customers, as data shows it can probably no longer be considered a "cheap" food option.
When McDonald's released its latest earnings report in the United States it said comparable sales were up but chief executive Christopher Kempczinski said low-income customers were avoiding its restaurants.
CNBC reported that he noted "traffic from lower-income consumers declining nearly double-digits in the third quarter, a trend that's persisted for nearly two years.
"Traffic growth among higher-income consumers remains strong, increasing nearly double-digits in the quarter."
A spokesperson for McDonald's in New Zealand said this country did not report on total sales or business performance so he could not say whether the same trend was happening here.
On social media posts recently, customers have questioned the price of the new Big Arch burger, and complained that there had been price increases on the McDonald's app.
Another said it was like a Big Mac but more expensive while a third customer said it was due to wage rises.
On Uber Eats this week, a Bacon & Egg McMuffin was $9.30, a Big Mac was $11.80 and a cheeseburger $6.80. A Big Arch burger was $16.
Burger King had a Whopper with cheese for $14.80 and a Hawaiian BK Chicken for $17.60. Its triple cheeseburger was $13.90.
Gareth Kiernan, chief forecaster at Infometrics, said Stats NZ data showed takeaway food of all types had become a lot more expensive recently.
Between September 2005 and September 2025, the consumer price index had risen 66 percent, the food price index 84 percent, ready-to-eat food 103 percent and a Big Mac 93 percent.
Fish and chips had lifted 154 percent.
Kiernan said the fact the Big Mac had increased in price less than the 147 percent increase in the minimum wage over the period could be considered a good outcome.
He said takeaway food prices would have been driven up by both the wider increase in food prices and the cost of labour.
Bodo Lang, a marketing expert at Massey University, said it was often said that McDonald's had stopped being a cheap option but he was not convinced that weas the case.
"Despite offering high priced menu items, McDonalds still offers a range of choices for smaller appetites and smaller wallets. Classic items, such as the Big Mac or Quarter Pounder are still likely at the cheaper end when compared to others. For example, McDonald's prices are comparable with other international chains such as Burger King or KFC. Even when compared to local independent operators, McDonalds prices are still fairly comparable. At least for its classic items. Ordering anything via an app and have it delivered will obviously at much cost and little convenience, thus distorting consumers price impression."
Burger Fuel was charging $24.50 for a Bacon Backfire burger on Uber Eats this week.
"What McDonald's has done very well is to diversify its product portfolio to appeal to different tastes and wallet sizes. While its classics are still available at comparatively low prices, McDonald's luxe items, such as its Grilled Chicken Bacon Deluxe, are at the upper end of the price range and compete head on with the likes of local chains, such as Burger Fuel. So McDonald's has done an excellent job of trying to appeal to its classic customers, particularly through bundles and offers, while appealing to others with premium priced items," Lang said.
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