Additional Coverage:
- Coca-Cola says fewer people are eating dinner out, and it’s hurting sales of its drinks (newsbreak.com)
Coca-Cola has experienced a downturn in North American sales due to a decline in restaurant visits, according to the company’s CEO James Quincey. Quincey noted during a recent investor meeting that drops in revenue have primarily come from “softness in away-from-home channels.”
Amid financial pressures, North American consumers, particularly those with lower incomes, are dining out less frequently. However, when they do, they tend to seek out value through combo meal deals.
As a response, Coca-Cola has been collaborating with various restaurants to promote food and drink pairings to entice more customers. Notably, Coca-Cola supported McDonald’s in launching a $5 summer combo deal.
Restaurant goers have been facing increasing prices, especially in fast-food outlets, as reported by Business Insider. This trend has led to reduced frequency in eating out, prompting restaurants to focus on cost-effective combo offerings like McDonald’s $5 deal which usually consists of an entrée, a side, and a beverage such as Coke.
While restaurant meal costs skyrocketed at the pandemic’s onset, recent inflation data from the Bureau of Labor Statistics indicates that these increases are beginning to stabilize.
In its most recent quarterly report, Coca-Cola disclosed a 1% decrease in unit case volume in its North America segment as of June 28, attributing the slump to lesser sales of water, sports drinks, and various Coca-Cola beverages. Nevertheless, the company overall reported a 3% rise in total quarterly net revenues, reaching $12.4 billion and surpassing earnings projections.