00:00McDonald's named Skye Anderson as president of its U.S. business after posting its lowest
00:05growth in over a year. Joining us now is Bloomberg Consumer Reporter Red Brown. Red, are these
00:10two things related? Is this a McDonald's that needs to do something to revamp its U.S. business?
00:14Yeah, I mean, I guess it's tough not to say they're related just given the timing of the
00:18results as they were, you know, the weakest in over a year for the U.S. business, which
00:23is so critical to McDonald's and then the timing with the replacement. So, you know,
00:27I don't have any kind of inside knowledge into what's led to that decision, but it's
00:31tough not to draw the line between these two events. What's interesting to me in the U.S.
00:37and maybe what's kind of going on with this change is, you know, we saw that the sales
00:41growth that they did have, which was very low, was driven by higher ticket price rather than
00:45foot traffic, where a lot of the strategy has been to drive traffic, right? The lower menu
00:50price items were to get people in the stores, and now we're seeing that sort of shift. So
00:54I'm wondering, too, if kind of what's going on with that strategy, if that's sort of
00:57maybe underlying, maybe a rethink of what's going on in the U.S.
01:00Well, of course, McDonald's is the poster child for the K-shaped economy, and it does suggest
01:06then that they're seeing problems with the lower income customers, and yet at the same
01:12time, price pressures for their ingredients.
01:15Yeah, absolutely. And it's interesting, it just came across the wire, the company saying
01:18that their under $3 menu is underwhelming their expectations. So that is interesting that that
01:23lower kind of prong of the K-shaped economy is maybe where some of that weakness is starting
01:27to develop. It's also kind of interesting that they've been pushing into sort of higher
01:32quality menu items as well. So maybe an attempt to sort of address the upper end of the economy
01:37as well. Can we make this more of a family restaurant again? They're remodeling some stores,
01:41trying to get this into a, you know, a regular sort of occasion for people to come spend time
01:45there. So they obviously are still doing things, probably picking up a lot of the things
01:48that we're talking about as well and seeing what they can do.
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