Consumer companies like McDonald's, PepsiCo and Coca-Cola are reporting mixed reactions to higher prices during the first quarter.
For roughly a year, companies have been raising prices to mitigate inflation, particularly after Russia's invasion of Ukraine sent commodity prices soaring. But consumers' spending habits are changing in response, too, even as inflation cools. Coca-Cola CEO James Quincey said Monday on the company's conference call that inflation and higher mortgage rates are top of mind for many consumers, despite low unemployment and improvements in gas prices.
Kempczinski said that consumers' resistance to higher prices has come from going "off script" from the models it uses to determine its pricing strategy. "When we execute where we know we have pricing power, we do quite well, but what we do find as we try to take pricing in the areas that are maybe a little bit more sensitive, the consumer pushes back on it," he said on CNBC'sAdditionally, Kempczinski said diners are less likely to add extras like French fries to their orders. Items per transaction have fallen by the low single-digits, he said.
But consumers are largely still buying Big Macs and McNuggets. The fast-food giant reported its third consecutive quarter of U.S. traffic growth, and it's gaining market share across all income brackets. Additionally, McDonald's topped Wall Street's estimates for its first-quarter earnings and revenue, helped both by its higher prices and increased demand.
Singapore Latest News, Singapore Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
PepsiCo hikes prices, consumer demand steady for drinks, snacksPepsiCo’s first-quarter earnings beat Wall Street expectations after strong consumer demand for soda and snacks, and as the company raised its prices to combat high inflation.
Read more »
Regulation Clarity Will Bring on More Consumer Web3 Users, PepsiCo’s Executive SaysPepsiCo Head of Next Gen DTC Connections and Innovation Kate Brady talks about the urgency in regulatory clarity in the customer web3 space at CoinDesk Consensus 2023 conference.
Read more »
McDonald’s Restaurant Revamp Is Paying Off, CEO SaysThe Big Mac maker has been tightening standards for franchisees and restructuring operations to lower costs; its net income rose 63% in first quarter.
Read more »
Leading edge AI company moves from San Francisco to Allen - CEO SpotlightMelissa Solis, CEO of Ibenta, joins David Johnson on today's CEO Spotlight.
Read more »
Pioneer Natural CEO Scott Sheffield to retire, COO Dealy to become shale company’s next CEOShares of Pioneer Natural Resources Co. fell more than 2% in the extended session Wednesday after the exploration and production company said that its board...
Read more »