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McDonald's Witnessed Continued Sales Growth Despite Inflation

Industry: Restaurant
Current: Company Performance

Global comparable sales at McDonald's increased by 10% in the third quarter of 2022
McDonald's and its franchisees have raised the product prices by 10% to cope with the growing cost of labor and food products
McDonald's is witnessing continuous growth in the United States traffic, despite price hikes in its menu

Soaring Inflation is Fueling Pressure on Restaurant Industry, Resulting in Sales Uncertainty

Consumer purchasing power has been reduced because of cloud gathering in the global economy. Restaurants face difficulties due to fluctuating sales and revenues. Based on the data from USD, the Consumer Price Index for all food increased by 10.9% from July 2021 to July 2022. The brands are expanding their product costs to combat the growing expenses, resulting in declining customer demand.

McDonald's Benefiting from Increased Prices of Competitor's Products, Consumers Seeking Value Meals

Restaurants are raising their food prices to combat rising inflation. Even though McDonald's has raised its prices, customers are still migrating to the chain from more expensive restaurants. McDonald's has lost some of its lower-income customers due to price hikes, and it is expanding its share among higher-income group customers looking for less expensive alternatives to dining at full-service restaurants.

The brand witnessed strong sales performance in the United States and European markets such as the United Kingdom and France. Comparable sales in McDonald's largest market, the United States, increased to 6.1% in the third quarter, aided by higher menu prices.

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