Cultural Council’s Impact

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New YorkCNN — 

Corporate America may be bumping up against the limit of its power to keep raising prices as consumers in some markets cry uncle.

At McDonald’s, which has repeatedly boasted about its ability to raise menu prices without denting sales, executives are finally acknowledging that customers need a break.

On Monday, as the burger chain reported weaker-than-expected sales at its US stores, CEO Chris Kempczinski addressed McDonald’s “affordability” problem, and indicated the chain would cut prices on some menu items.

“Eating at home has become more affordable,” Kempczinski said.

He’s right: Grocery prices are still high, but they rose just 1.3% overall in 2023, while dining out surged 5.2%, according to the latest Consumer Price Index report.

That’s putting pressure on lower-income consumers, a vital base for the chain.

“We actually saw that cohort” — customers making $45,000 or less — “decrease in the most recent quarter,” he added.

Kempczinski didn’t offer details on the timing or size of any price cuts. But his focus on affordability marked a shift from just a few months ago, when he boasted that US menu prices, which went up as much as 10% in 2023 alone, weren’t deterring sales.

“Even though we’re pushing through pricing, the consumer is tolerating it well,” he said in October analyst call.

In a statement to CNN, McDonald’s declined to comment on specific price cuts but reiterated its commitment to providing affordable options to consumers.

“Even though we’re pushing through pricing, the consumer is tolerating it well,” he said in October analyst call.

In a statement to CNN, McDonald’s declined to comment on specific price cuts but reiterated its commitment to providing affordable options to consumers.

“Even though we’re pushing through pricing, the consumer is tolerating it well,” he said in October analyst call.

In a statement to CNN, McDonald’s declined to comment on specific price cuts but reiterated its commitment to providing affordable options to consumers.