McDonald's stock slides: Consumers pick groceries amid inflation

Shares of McDonald's (MCD) are trading lower after CFO Ian Borden indicated lower-income consumers were choosing to eat at home more often. According to the latest Consumer Price Index (CPI) reading, the rise in grocery costs has decelerated significantly more than dining costs.

Yahoo Finance Retail Reporter Brooke DiPalma joins the Live show to put McDonald's performance in the context of the CPI report.

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Editor's note: This article was written by Nicholas Jacobino

Video Transcript

- We also heard from McDonald's, the CFO speaking at an investor conference today. And interesting here, he is talking about people going to grocery stores, rather than making as many visits to a McDonald's. Which is interesting as you look at it alongside the Dollar Tree news.

BROOKE DIPALMA: Yeah, of course, we have that CPI report out yesterday. And we continue to see the cost of restaurants not decelerate as much as the cost of groceries. The cost of groceries has come down significantly, or rather the rise in the cost of groceries has decelerated much more so than the cost to dine out. And so consumers are being much more aware of just how much they're spending when they go out, being more frugal about how far they can spend their dollar, whether it be at grocery or dining out.

And McDonald's CFO really saying here that they are losing that lower income consumer, not to another chain, but to the grocery store. And I think this will definitely be one to watch how value and affordability plays into this. How all these fast food giants are really looking to get in front of consumers, and say we have the best bundle, we'll give you the best bang for your buck here.

- Now, you also talked a little bit about international sales as well. So all of that weighing on the shares today. Thanks, Brooke. Appreciate it.