For all the talk of the U.S. job market having recovered to pre-recession levels, and improvements in consumer spending, one fact continues to bedevil restaurants like McDonald’s and discount retail chains: low-income Americans can’t, or don’t want to, spend on the pricier offerings those companies are trotting out.
McDonald’s reported a worse-than-expected 1% drop in sales at U.S. restaurants open at least 13 months — its seventh month without growth — and blamed “ongoing broad-based challenges.” (Wall Street analysts had been expecting a 0.1% increase, according to Consensus Matrix.)
One of those challenges is that customers have been coming in less often after McDonald’s pared the selection of items on its Dollar Menu last year.
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