Ola!
Curse and Coffee friends,
Today, we explore how fast food is now a luxury.
Hit reply and let us know what you think (we read all of your kind words).
Coffee at the ready…
The Big Sip
Image: McDonalds
The take: Fast food priced out the people it was invented to feed.
What happened: Bank of America data released on November 13 showed that lower-income fast-food traffic had fallen by nearly double digits for two years. Wages grew just 1% against 3% inflation. The math stopped working.
Why it matters: McDonald's Q3 report confirms that the bottom tier can't afford the value menu. So chains pivoted: forget the broke customers, chase margin from wealthier ones instead. The business model just changed. Poor people are now bad for fast food profits.
What to watch: December CPI food-away-from-home data and Q4 restaurant earnings calls for signs the pullback spreads to middle-income consumers. If McDonald's is too expensive for people making $30,000, wait until people making $60,000 start doing the math.
The “value meal” is now an ironic term.
Sponsor Break
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