Fast-food companies seeing low-income diners pare orders

Runaway Prices at US Fast-Food Joints and Restaurants Impact Low-Income Consumers

According to recent polling by Revenue Management Solutions, a consulting firm, approximately a quarter of low-income consumers, defined as those making less than $50,000 a year, have reported eating less fast food, while about half have reduced their visits to fast-casual and full-service dining establishments. This change in behavior is attributed to the rising prices of food, which have increased by 20% from January 2021 to January 2024, the fastest jump on record. The impact of these price increases is evident in the difficulties faced by low-income individuals in paying everyday expenses, with nearly 80% experiencing moderate to high levels of stress.

Challenges Faced by Low-Income Consumers

• Half of people earning less than $35,000 a year struggle to pay everyday expenses.
• Nearly 80% of people earning less than $35,000 a year experience moderate to high levels of stress due to price increases.

Fast-Food Companies and Low-Income Consumers

Fast-food companies heavily rely on low-income consumers as a significant portion of their customer base. However, these consumers are often the first to cut back on spending and the last to return. In response to the changing spending habits of low-income consumers, fast-food chains are adjusting their strategies. Instead of across-the-board menu slashes and broad discounts, chains are becoming more selective, targeting specific demographics or limiting discounts to specific meal times or channels, such as mobile apps or delivery services.

Strategies Implemented by Fast-Food Companies

• McDonald’s is relying on its existing “value menu” to appeal to low-income consumers and is committed to evolving its value offerings.
• Wendy’s introduced a limited-time $1 burger available only through its app.
• Loyalty apps are being used by major fast-food brands to increase retention and the average amount of money spent. These apps provide chains with valuable transaction and demographic data.

Impact on Fast-Food Chains

Despite a drop in traffic, fast-food chains have seen consistent sales supported by increased prices. This has led to a shift in priorities, with chains prioritizing profit over traffic. Unlike a decade ago, fast-food companies are no longer in a hurry to chase customers. Instead, they are focusing on maintaining profitability.

Positive Examples

Not all fast-food chains are experiencing weakness among low-income customers. Taco Bell, for example, has seen better performance in low-income markets compared to other locations. This indicates that affordability remains a key factor for low-income consumers.

Overall, the impact of rising prices on low-income consumers highlights the need for sustainable development goals (SDGs) that address issues of affordability and accessibility in the food industry. By prioritizing the SDGs, fast-food chains can ensure that their offerings remain inclusive and affordable for all consumers, regardless of their income level.

SDGs, Targets, and Indicators

1. SDG 1: No Poverty

   • Target 1.2: By 2030, reduce at least by half the proportion of men, women, and children of all ages living in poverty in all its dimensions according to national definitions.
   • Indicator 1.2.2: Proportion of men, women, and children of all ages living in poverty in all its dimensions according to national definitions.

2. SDG 2: Zero Hunger

   • Target 2.1: By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations, including infants, to safe, nutritious and sufficient food all year round.
   • Indicator 2.1.1: Prevalence of undernourishment.
   • Indicator 2.1.2: Prevalence of moderate or severe food insecurity in the population, based on the Food Insecurity Experience Scale (FIES).

3. SDG 3: Good Health and Well-being

   • Target 3.8: Achieve universal health coverage, including financial risk protection, access to quality essential health-care services and access to safe, effective, quality and affordable essential medicines and vaccines for all.
   • Indicator 3.8.1: Coverage of essential health services (defined as the average coverage of essential services based on tracer interventions that include reproductive, maternal, newborn and child health, infectious diseases, non-communicable diseases and service capacity and access, among the general and the most disadvantaged population).

4. SDG 8: Decent Work and Economic Growth

   • Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.
   • Indicator 8.5.2: Unemployment rate, by sex, age, and persons with disabilities.

5. SDG 10: Reduced Inequalities

   • Target 10.1: By 2030, progressively achieve and sustain income growth of the bottom 40 per cent of the population at a rate higher than the national average.
   • Indicator 10.1.1: Growth rates of household expenditure or income per capita among the bottom 40 per cent of the population and the total population.

Table: SDGs, Targets, and Indicators

Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

   The issues highlighted in the article are connected to the following SDGs:

   • SDG 1: No Poverty
   • SDG 2: Zero Hunger
   • SDG 3: Good Health and Well-being
   • SDG 8: Decent Work and Economic Growth
   • SDG 10: Reduced Inequalities

2. What specific targets under those SDGs can be identified based on the article

   Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

   Source: nypost.com

    

   

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