FAST FOOD TROUBLE! Even McDonalds IS SUFFERING!

you know things are getting bad out there when McDonald's is even starting to be hurting you know McDonald's was once like the best deal for fast food they had the dollar menu for all those years that's all over with now and you know one thing that we can look at as a weak economy as a sign things are not going as well as we being told is people are pulling back on even buying this cheap fast food which is a good thing I've covered this a few times before as far as like the pullback but there was an entire story about McDonald's today because their earnings are suffering and their share prices are going down because people are not spending the money at McDonald's like they used to and as you can see my lovely wife Lizzy is walking next to me today hi guys so we're up here walking through the swamp over in Palm Coast so what they came out and said is that economic pressure is starting to build on consumers which is resulting in declining restaurant visits across the industry Donald's for months has warned of a weakening economy but Executives said the headwinds so far this year are steeper than previously anticipated so think about that for a minute guys just that one statement from McDonald's already tells you that things are not going the way that we're being told you know we keep being told the econom is great but even McDonald's that sells some of the cheapest food available is saying that people are not coming in and buying this food and they're not meeting their earnings expectations which is hurting their Corporation now obviously McDonald's is going to be fine they make a lot of money and they're going to uh get through this perfectly I'm sure but the problem is things are just not what we're being told right now so right now McDonald's chief executive Chris Kinski I don't know if I'm saying that right uh he said that the company is focused on ensuring food remains a good value for consumers dollars he said that McDonald's has lost its General lead on affordability in a few markets and that its us restaurants would benefit from taking a unified National approach to meal deals breakfast promotions and other value offerings so what they're trying to do is figure out ways to get people back into the restaurant kind trying to come up with ways where they can bring back different value meals and incentives for people to come in you know that's the thing guys why would they have to do this you know McDonald's one of the cheapest fast food restaurants why would they have to do something like this if the economy was going well that's what I keep questioning over and over when I hear about all these stories I got to tell you what guys this jungle here is like a lot thicker than I was anticipating this is good for like a nature walk but I think it's a little too thick forest for the the video so I'm going to go back the other way holy moly guys I've been looking for an alligator in Florida for years I've never seen one before like this I mean I've seen him when I was a kid but not recently I've always looked for them for you in the videos and here they are probably a bunch of them in this Lake McDonald's also said that their sales are suffering internationally because of all the conflict that's happening in the Middle East right now so that's dragging things down even further from them their earnings came in also below expectations as of the first quarter and over the past year McDonald's stock prices have fallen about 8% so that's a clear indicator if you ask me that they're suffering guys and the economy is also suffering even the ex Executives at McDonald's are acknowledging now like hey things are not as robust as we thought and lower income consumers who are basically our largest customer base have drawn down their savings and uh you know they're they're shifting their spending away from fast food they're spending more money at the grocery store and cooking at home which is a good thing like we've talked about it's good for people to do this it's better for their health to do this but it's not about the health we're not talking about health this isn't a health Channel what we are talking about is the health of the economy last time we talked about fast food I talked about how well you know they don't talk about how many burgers they sell they just say well our earnings were up so that must mean that things are going well right because they kind of use those numbers and say well the sales are higher than they were last year so this must mean that business is improving well they just came out and said the reason that their earnings went up 1.9% which is below Expectations by the way is because of price increases and marketing of its core menu items has helped boost sales in the latest quarter guys so you know advertising along with boosting prices helps boost sales okay so think about that obviously advertising gets more people through the door but everybody who does come in now has to spend more because of inflation so is that really a sign that McDonald's is doing well obviously not cuz they're even coming out and saying that they're not doing well and here's another big problem that all restaurants are facing right now that I continue to mention here on the channel is that they say that the inflation for food and paper and other materials that they need to spend money on to keep the restaurant uh moving along has kind of leveled out but one part of inflation for them that has not leveled out is labor cost okay especially now there's this new law in California where fast food chains have to pay $20 an hour so that's a big problem for McDonald's but across the board they have to pay people more because this is starting to a precedent for people who work in the fast food industry and saying Hey I want more money or I'm just going to get a different job you know so they need to have help they need to have people working in their stores which puts more pressure on places like McDonald's to pay more even if they're not in California I mean mcdonals is trying to pull out different tricks out of the hat too because they're even supposed to start selling Crispy Cream Donuts at their restaurants and they're hoping that's going to start uh boosting their breakfast sales so they're doing different things to try to bring people in through the door guys they have to do something to keep people coming to McDonald's and you know this is just one company the biggest burger chain in the world if they're seeing a Slowdown that's not satisfactory to them I just can't imagine what other businesses that are much smaller are seeing right now they can't even compete with the prices at McDonald's so those are the kinds of things you got to be thinking about right now and so I'm willing to bet a lot of these people that are saving money by not going to McDonald's are shopping at Aldi in fact there was a story today talking about how the foot traffic at Aldi stores in March of 2024 was up 26% compared with the prior year and higher than the 6% increase at its Kroger stores and a 15% uptick that Trader Joe's saw so all the grocery chains are seeing more people shopping at grocery stores and less people buying food at restaurants which is out of necessity because people cannot afford it guys and Kroger is notor for you know charging way too much for all of their food and so Aldi is reaping the benefits from a lot of this because it's literally the cheapest place that people can buy groceries and always has been in fact my parents used to shop there when I was a kid I used to I don't know how many Aldi trips I made with my mom going there as a kid so I'm well familiar with the fact that you know the food has always been cheaper there it's always been a way that people are saving money but when you see a big increase in foot traffic in a store like that it's because people cannot afford to go and buy food at other places especially going out to eat they say that on a basket of 50 typical household items that all these prices are about 6% cheaper than Walmart's and that was for the first quarter of this year and fresh and frozen items are about 16% cheaper than Walmart and things like barbecue sauce and little uh things like that that are not named brand can be up to 50% cheaper than other grocery stores so it is a much better deal if you're looking to save money on groceries try to go to the Aldi nearest to you the problem is if you can find an Aldi near you that's the real thing because Aldi still only represents about 3% of the grocery sales Nationwide when you compare with Walmart it's 30% so they still have a very low market share when it comes to grocery sales probably because Walmart's also a lot more convenient there's way more of them and you know people can buy everything at Walmart instead of have to make a separate trip to the grocery store and people say that listen everybody's feeling the cost of higher food prices right now but we feel at the least when we're going to Aldi so people like going there in order to stretch the dollar as far as possible and you know guys when I look at all these things like okay McDonald's earnings are not coming in as expected they have to do different things to lure people in to buy the cheapest fast food in the world and all these is seeing a 26% increase in business doesn't that tell you something doesn't that tell you that things things are slowing down behind the scenes not everybody can afford to just spend money however they want and apparently Aldi is committed to trying to continue to find ways to keep prices lower in their store um but one thing that I saw that was kind of concerning that they did that they're saying is saving them you know millions of dollars they have switched to new digital price tags on the store shelves okay and whenever they turn bright red they signal a sale and they can just do that with a press of a button so they're saying they're saving about $20 million switching to digital price tags last year and it saves them about 156 tons of paper and the time it takes employees to replace the paper my question is are they going to use this new setup to implement a form of surge pricing like we talked about with uh Wendy's several months ago and uh since they had so much backlash from that they decided to cancel their plans and no longer move forward with the surge pricing because you know people are boycotting this they don't want to pay more for an item just because of the time of day or if the store is busier but now that a place like Aldi is going to have you know these digital price tags they can kind of switch it whenever they want you know and and make it so that you don't really know what the price is is supposed to be it can be different you know by second by second essentially you know typically when you go to the grocery store you grab something off the shelf and this is something that uh Dollar General has been in big trouble for I was thinking about making a video about this is that you know you go to a place like Dollar General it says this item is $2 and you get up to the register they check you out and it's $2.75 well might not sound like a big deal but 75 cents here you know across millions of customers adds up to millions of dollars for Dollar General and it's a way to scam people but Aldi could do the same thing by putting a price there with the digital price tag and then okay you're going to check out you're walking around the store for an hour and now the price is higher you know because you didn't check out the moment that you grabbed it off the shelf so whether whether or not they're going to use it for that I don't know but I'm just saying that it might be a way for them to you know get away with charging people more money literally as I'm shooting this video the FED is having their next meeting right now as they're trying to determine what they're going to do with the interest rate situation and I think we can all pretty much safely assume they're not going to be cutting interest rates at all this meeting in fact they might even be discussing right now maybe we should be raising rates we don't know this yet but what we do know is that inflation has been coming back stronger and stronger since the beginning of this year which has basically squashed the fed's plans of lowering rates anytime soon and it's funny because then they use terms like well the reason why we're we're holding things steady is because the economy has continued to demonstrate strong momentum so it's funny because all of those surface level numbers that they look at in order to determine that like the unemployment rates the jobs growth numbers and GDP those are like the big three that the FED looks at and and assess the economy and say okay are things going in the right direction that we want to see and all those numbers supposedly are going in the right direction for them but when you look beneath the surface and see these other issues even big corporations like McDonald's telling you that our sales are suffering and people starting to go to cheaper places to try to save money doesn't really reflect the reality of those higher GDP figures or the lower unemployment and things like that now they're even wondering if they can get it down to 3% and their goal has been 2% and there's been a lot of chatter about the FED just giving up at 3% and saying well we Tred to get it to 2% we can't and we're just going to leave it at 3% but um we I don't know we'll see guys I mean this is going to be the year that's really going to determine that because it's been consistently coming in higher 3.6 3.7% I think the last one was 3.9% reading and it's not going in the direction that they want to see so they'll be even lucky to get it down to 3% at the way it's going right now so inflation supposedly always comes in waves and because of that this looks like we're heading back up you know we're on the next wave of inflation going back up and I'm wondering if they can really do anything guys you know my opinion on this has been that they need to raise rates some more and they very well may do that you're probably going to hear some mumbo jumbo out of Jerome Paulo this week saying you know the inflation's not coming down to uh exactly where we're happy at and um you know this doesn't give us the confidence of inflation declining to 2% so really not going to do anything we're just going to sit here and keep rates the same which really I think they know they should probably be raising them higher but they don't want to do that so right now there's two possibilities that the FED thinks might happen with inflation and one possibility is that inflation continues to move lower but in an uneven and bumpy fashion so these little uh blips that we're having with inflation going back up they think it's still going to Trend lower over time but maybe we're going to have a few months here and there where the readings come in higher well I doubt that cuz that's not what history shows us what they say the second possibility is that inflation rather than a bumpy path to 2% just gets stuck closer at a level of 3% we're not going to be able to cut rates in we're going to be stuck at 3% for a while and who knows maybe it's even going to go higher because it has been going higher consistently over the past several months and here's an interesting chart I want to throw up here this chart shows you how many months passed between the last Fed rate hike and how long it takes for them to start lowering rates again okay so the top part is where we're at right now and so it's been almost a year since they uh have been holding rat steady at around the 52% range that it's at now and what do you notice when you look back to this chart goes all the way back to the 1980s and the only time on this chart where they held rates higher for longer than this was when during the GFC now this is funny because this is all leading to the last uh great financial crisis when they held rates higher for longer and then what happened bam we slipped into the greatest recession in modern history and then what they started lowering the rates again after that guys but guess what happens it's too late once they start lowering the rates it doesn't matter you know because of the lag effect because it takes so long for these changes to manifest throughout the economy it won't matter by the time they start lowering rates because the damage has already been done and this chart proves that you know they had rates higher for longer for 15 months leading up to the GFC and by the time they started lowering rates was we were already in a recession for like 6 months by then so now some of the experts are saying it's more likely that we're going to see a rate hike than a rate cut anytime soon given the State of Affairs right now they think that's very much possible due to the fact that we might see a significant increase in commodity prices as well as wage growth accelerating and evidence that the public is anticipating higher inflation to continue well into the future so if that's the case which it looks like it very well may be then they might just start hiking rates again which would be a complete GameChanger you know we've been told since last year that there was going to be six or seven rate Cuts this year well now it's dwindling down to maybe zero and now they're talking about maybe hiking rates well that's what I've been saying here on the channel trust me I don't consider myself any sort of expert but to me a lot of this has just been Common Sense guys no clearly spending is out of control still when it comes to housing and buying cars and things like that and I have said this before on the channel in order to stop that you need to have the interest rates prohibitively expensive so it makes those items completely unaffordable unless you can pay cash you know one thing people don't realize is that if you can't afford to pay cash for something then you really can't afford it if you have to finance it and putting on a payment plan then you can't afford it and guess what if the interest rates are still low enough to allow people to put something on a payment plan then they're not high enough to fight inflation so really this whole fight on inflation that the FED has been doing has really been half-hearted you know it's not a real sincere fight on inflation because the rates are not as high as they need to be and when you combine that with the fact that the FED is having like restrictive monetary policy but our government is spending like a drunken sailor then that doesn't help things either because the government's still doing everything they can to stimulate the economy look at all the programs we have you know look at all the free money they still give people they still have the Biden loan forgiveness program for all the student loans for giving people's debts you have people still you know getting tons of welfare and free money to live you still have z% or 1% down payment for mortgages to get people into houses even if they don't have the greatest credit all kinds of things like that still exist and those are all government programs that help stimulate the economy and keep people spending and you know I've had people write me here on the channel say Michael well don't you understand that our entire economy revolves around spending like yes I understand that I get that and that's what we need to stop for a while you know there needs to be a Slowdown in this in order to see prices come down guys you know a lot of people say because of all the inflation we've had that prices on things are never going to come down well they might if we give it a chance to you know but we haven't really given it a chance yet and if we don't give it a chance then we're never going to know we're just going to continue to pay more and more for everything until you really can't afford it so it's just kind of delaying the inevitable at this point so anyways for all of you who made it this far we came up here cuz it was my wife's birthday on April 28th if you want to wish her a happy birthday go on and do that we're enjoying our time up here in Palm Coast getting away from Miami and a little bit more quiet area walking through the forest here one one time yeah exactly no doggies so if you guys enjoyed this video make sure you subscribe to the channel and if you don't want to wait for my next video to come out check out this one on the screen right over here and I'll see you in the next one

Channel: Michael Bordenaro

Views: 189,726

Keywords: fast food, minimum wage, food prices, breaking news, fast food prices, cost of living crisis, economic collapse, economy, federal reserve, interest rates, recession

Id: CyYI5LwtkFc

Length: 19min 45sec (1185 seconds)

Published: Wed May 01 2024