Customers Slow Spending at Starbucks, McDonald’s, Pizza Hut

In January, economists warned that customers would spend less at places like fast food chains as rising inflation drives up the prices of necessities — and earnings reports released this week show those predictions might have come true.

McDonald’s, Starbucks, Pizza Hut, and KFC all reported lower-than-expected sales this week.

“Clearly everybody’s fighting for fewer consumers or consumers that are certainly visiting less frequently, and we’ve got to make sure we’ve got that street-fighting mentality to win, [regardless] of the context around us,” McDonald’s CFO Ian Borden said on the company’s earnings call on Tuesday.

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^{The McDonald’s logo. (Photo by Paul Weaver/SOPA Images/LightRocket via Getty Images)}

McDonald’s saw same-store sales grow 2.5% in the U.S. last quarter, from January through March, which was slightly below expectations of 2.55% growth and much lower than the fast food chain’s 12.6% growth in the same period last year.

Related: McDonald’s CEO Says That ‘Affordability’ Is on the Way as Company Struggles Through Sales Slump

The other companies all reported declines in the same category. Same-store sales at Starbucks dropped 3% in the U.S., its first decline in that category in almost three years, while Pizza Hut and KFC saw 7% and 2% same-store declines, respectively.

The earnings reports were weaker than analysts expected, which may be due to inflation and higher prices. McDonald’s raised menu prices by 10% last year.

A Restaurant Business analysis of McDonald’s items across all 50 states shows that the average price of a McDonald’s cheeseburger jumped 55% in the past three years.

“Eating at home has become more affordable,” McDonald’s CEO Chris Kempczinski said on an earlier February earnings call.

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Data from a recent consumer price index report backs up Kempczinski’s statement. The report showed that prices for goods in the “food at home” category rose 1.2% in the past year, while food prices away from home rose 4.2% over the same period.