Published: Wednesday, May 22, 2024
Fox Business reported that the results of each company show how market conditions have a different impact on their global operations. Trends also indicate that more consumers choose to cook at home.
The trend is not limited to the national brands, but also includes small businesses that are struggling with rising food costs and wages.
Yum! Brands, the company that owns KFC Taco Bell Pizza Hut and Taco Bell, reported a decline of 3% in sales at same-stores for the first three months.
Yum! Brands CEO David Gibbs said that the downturn was expected due to several factors, including market conditions related to the Middle East conflict and a return to more typical inflation levels. David Gibbs of Brands said that the decline was expected due to several factors including the market conditions associated with the Middle East conflict, and the return to more normal inflation levels.
Gibbs, a KFC spokesperson, said that the international market places a greater emphasis on value. We are seeing the exact same thing in America.”
Pizza Hut, one of its brands, saw the biggest drop in sales at the same store, falling 7%. KFC, on other hand, experienced a much smaller decrease, falling 2%. Taco Bell experienced a modest 1% increase.
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Yum! has managed to overcome these obstacles. Brands saw strong growth in same-store sales over the past two years, indicating positive momentum at the end of the quarter.
Starbucks’ problems were even more severe, as a 4% drop in comparable store sales worldwide was recorded during the second quarter. The decline was due to a drop of 6% in transaction volume. However, this was somewhat offset by an increase of 2% in the average ticket price.
Starbucks CEO Laxman Nrasimhan cited the continued cautious behavior of customers and a deteriorating economy outlook that is affecting traffic in key markets.
Narasimhan, Fox Business, said that “headwinds” discussed in the previous quarter continued to affect a number key markets. We continue to feel an impact from a more cautious customer, especially with our occasional customers. A deteriorating economy has also impacted customer traffic, and the effect was felt across the entire industry.
Laxman added, “In the U.S. severe weather affected both our U.S. comp and our total company comp by almost 3% during the third quarter.” The rest of our challenges are due to less visits by our occasional customers.
McDonald’s, meanwhile, reported a 1.9% growth in comparable sales for the first quarter. However, this rate of growth was lower than previous quarters.
McDonald’s CEO Chris Kempczinski stated that the global impact of consumer pressures continues to be felt. The economic downturn and higher prices have caused consumers to be more careful with their purchases, which has had a significant impact on the quick-service industry.
Kempczinski stated that consumers are becoming more selective with their spending as they face higher prices. This puts pressure on the QSR sector. It is important to note that the industry traffic in Q1 was flat or declining in the U.S. and Australia.
In the face of economic pressures, QSRs such as those three mentioned have focused on value and promotions to attract consumers, who increasingly prefer to dine in to better manage their expenses.
The strategy is part of a larger trend in the industry, where competitors like Chipotle, Restaurant Brands International and others have reported increases in comparable sales for their most recent quarterly periods.
Image: Depositphotos
Source: SmallBizTrends