Almost all all U.S. QSRs have reported decreased sales.  This was evident in the most recent quarterly report by McDonald’s Corp. that documenting a decline in revenue after nine consecutive quarters of higher than five percent growth.  A similar story was evident with Restaurant Brands International subsidiaries including the Burger King franchise. Yum! Brands recorded declines for their KFC and Pizza Hut segments.  Wendy’s and Starbuck’s have also reported downturns in sales value and traffic.

Restaurant operators attribute the decline to customer patronage to progressively higher prices especially during and following the COVID period that was characterized by supply chain disruption.  Despite recovery from the pandemic, prices have not fallen and the gap between eat-at-home and purchased meals has widened.  In response, QSRs are offering value deals with McDonald’s the first to introduce $5 combinations.  This initiative to increase sales, initially announced to be over a limited period but now extended indefinitely, was soon followed by competitors. The race to the bottom should attract customers but will obviously detract from the bottom line.

The plight of the QSRs has resulted in predictable impacts on suppliers. Manufacturers of packaging material have been adversely affected by the decline in QSR sales.  Graphic packaging, West Rock, and Berry Global have reported on the effect of lower traffic on their businesses.  Although no specific data is available it will appear that beef has suffered to the advantage of chicken that provides higher value for sandwiches.  Egg servings despite prices and inventory levels for medium size suggests that they are still in demand by QSRs especially those serving all-day and extended breakfast periods.

It remains to be seen whether meal deals will regain business from increasingly frugal customers who are becoming restrained in their expenditures. Consumers appear willing to spend time on supermarket and warehouse shopping, food preparation and clean-up at the expense of convenience.