Sales at McDonald’s (MCD:NYSE) fell for the first time in three years in the second quarter as the fast-food giant fell victim to consumers cutting back on eating out.

For the three months to the end of 30 June, McDonald’s reported a 1% fall in global comparable sales as diners choked at the high cost of its burgers, fries and soft drinks.

In the US, same-store sales fell by 0.7% as value meals failed to entice customers back to the fast-food giant. McDonald’s said foot traffic to its US restaurants actually fell during the quarter.

Revenue of $6.49 billion was flat on the same quarter last year, but net income fell 12% to $2.02 billion compared to $2.31 billion last year missing analysts’ forecasts.

McDonald’s said revenue from its International Developmental Licensed markets fell 1.3% due to the continued conflict in the Middle East and negative comparable sales in China, while comparison sales in Latin America and Japan were more positive.

The firm blamed the rising cost of ingredients, energy and packaging for hiking its prices over the past couple of years, but chief executive Chris Kempczinski recognised consumers were becoming ‘more discriminating with their spend’. 

In an attempt to lure more low-income customers back to its restaurants, the firm launched a meal deal across the US in June allowing diners to buy a McDouble or a McChicken along with small fries, four-piece McNuggets and a small fountain drink for $5.

The deal was  meant to last until the end of July but many sites are considering rolling it out into August to generate more sales.

The dip in McDonald’s second-quarter earnings came as the US Conference Board’s consumer confidence index showed another fall to 100.4 last month from a downwardly-revised 101.3 in May.

McDonald’s shares ended the day up 3.7% at $241, although that still leaves them down 12% year-to-date.

Analysts have attributed this ‘spending fatigue’ to sticky inflation, pandemic savings running out and Covid stimulus cheques being spent.

The escalating price of the global fast-food giant’s signature Big Mac sandwich, especially outside its home market, hasn’t helped McDonald’s results in recent quarters.

According to the Big Mac Index, created by The Economist in 1986 to compare the price of the popular burger in dollars across 13 countries, the most expensive Big Mac is in Switzerland and costs $8.17 or 44% more than the exact same product in the US.

After Switzerland, Norway is the second-most expensive country at $7.14, while Britain is seventh at $5.71, not far above the US. 

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