GoKawiilMcDonald’s misses Q2 estimates across the board, as consumers pull back on dining out.
Nonetheless, McDonald’s stock surged $10, suggesting it’s not a big deal or that the worst is over:
People may complain about prices or stories may go viral about fast food being too expensive, but this hasn’t affected consumers’ habits much. Indeed, McDonald’s stock has performed quite well despite this.
I posit McDonald’s, like Chipotle and Wing Stop, has become yet another ‘premium product’ for the upper-middle-class. That is the biggest customer base right now. It’s a misconception that only poor or lower-middle-class people consume fast food or that fast food is most popular with those people. Maybe this was true decades ago, but not anymore. The days during the ’90s growing up and scrounging for change to go to McDonald’s are long over.
The people who are spending $40+/day on Chipotle and other premium fast food are not by any stretch poor. They have tons of disposable income and good jobs. 10-15 years ago the thought of lunch being a premium or luxury experience was inconceivable, but that is where we’re at now. Spending $100 for two on lunch or dinner has become the ‘new normal’ or an afterthought.
Moreover, it’s not as if the wealthy are only subsisting on kale or arugula. To the contrary, many of the wealthiest people in the world have quite the palate for unhealthy food, like Bill Gates or Warren Buffet, whose diets of coke, pizza, and hamburgers are well known. Uber and Doordash food is also expensive due to all the various markups and tipping, in addition to being quite flavorful and calorie-rich.
It’s not just fast food, but Americans are clearly willing to spend a premium for flavorful, calorie-dense food and large portions from independent sellers or smaller chains. Consider that there is this entire niche on YouTube or TikTok where young people make 60-second reviews of inordinately-expensive artisan or street food from local restaurants. These videos not uncommonly go viral, with thousands of up-votes and approving comments. This video below got 2 million views and 600 comments:
This is why social media narratives are sometimes confusing or contradictory. Three common narratives on social media are that:
1. Obesity is a health crisis
2. Palatable, calorie-dense foods are major contributors to obesity
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