McDonald’s golden arches are starting to lose their shine. The fast food giant is facing a crisis. Growth is stalling, quality has plummeted, and customers are abandoning them. In early 2024, McDonald’s reported a shocking drop in sales- down by 1% after years of success and growth. So how did one of the biggest corporations on the planet, an American institution, mess up so badly? In today’s episode of The Infographics Show, we’ll reveal the real reason McDonald’s is failing. You’re tired after a long day at work and don’t have the energy to cook anything. You’re looking for something filling and tasty, and most importantly of all - because you just checked your bank account and cried a little - cheap. So you drive to your nearest McDonald’s. Solution found! You haven’t been there for a few years, but you know this is where you can always get a cheap, tasty meal. You’re in the drive-thru line, ready to order your classic combo of a Big Mac, fries, and a soda, you glance up to the menu and your jaw drops. $5.99 for a Big Mac alone? And that’s assuming you’re not in one of the more expensive states - looking at you Hawaii, with your $7.39 Big Mac. We assume the increased price includes a tropical view. But you also want fries - $1.89 on average - and a Coke - $2.59. You try to do the math in your head - then realize you have a smartphone and can just use the calculator app - and arrive at a total of $10.47? Before taxes and fees? Who’s running this place, Ronald or the Ham Burglar? Since you make $7.25 an hour at your minimum wage job, you’re about to pay almost an hour and a half of your wages just to eat…and to eat fast food, no less! On top of rent and bills and insurance, that’s a lot of money. You may as well have gone to a casual sit-down restaurant and at least enjoyed better food. You remember when Big Macs used to famously cost 99 cents. How is it that you could easily grab a burger with your allowance when you were just a kid, and now you can barely afford it with your adult job? You can’t have messed up your life that badly, right? Well, maybe. But maybe not. It might help to know it’s not just you. In 2024, 2,000 Americans were asked their opinions about fast food, and 62% of them said they had to cut back because of the insanely high prices. In 2009 for example, when the federal minimum wage became $7.25 an hour, the average cost of a Big Mac was $3.57…in other words, it cost less than half an hour’s pay even if you were making the smallest amount of money you could make. Inflation has hit everyone hard, but fast food prices are skyrocketing faster than most. Fast food prices have risen considerably faster than prices at sit-down restaurants and three times faster than supermarket prices – a shocking realization for anyone who has come back from their local Costco with empty pockets, or from their local Whole Foods bankrupt. If you’re wondering whether you should brush up on your cooking skills, it may not be a bad idea. In fact, no less than the CEO of McDonald’s, Chris Kempczinski, admitted on a recent call that “eating at home has become more affordable”, and that’s bad news for fast food giants like McDonald’s, even though it might be great news for your body and overall health. Hey, you may not be able to make a meal as good as your mom did, but perhaps this way, you can afford electricity! Waiting in line, you think back to when you stopped at Taco Bell and Wendy’s recently, and you don’t remember prices being this bad. What’s happened over at McD’s? One reason for higher prices that has frustrated customers is McDonald’s raising its prices more than it needs to. FinanceBuzz found that between 2014 and 2024, inflation raised prices by about 31%. At McDonald’s, however, items like the McNuggets became 83% more expensive in the same time. To be fair, most fast food chains also raised prices by an average of 60%, so everyone seems to be outdoing inflation. But “McDonald’s was the worst offender - tripling the rate of inflation… Popeyes, Taco Bell, Chipotle and Jimmy John’s raised the prices of their menu items at more than double the actual inflation rate”. And the executives don’t really seem to care. In October of 2023, the same CEO who is now worried about customers leaving to cook at home, said “even though we’re pushing through pricing, the consumer is tolerating it well”. Or in simpler words, “those suckers are still paying us”. Now, to be fair, McDonald’s headquarters doesn’t directly set all prices. 90% of McDonald’s locations are owned by franchisees, who get to set their own. But the chain also raised prices because of a bad spiral they’re in. Basically, McDonald’s had to raise prices because they were getting less customers. Unfortunately, this has now become a cycle; as higher prices drive away more customers, McDonald’s keeps raising them to make up the money. But wait…why are customers leaving McDonald’s in the first place? Well, let’s get back to you, the McDonald’s customer, waiting to order. As you’re trying to remember how much money you need for rent, you finally pull up to the drive-thru speaker to give your order. And suddenly, a robotic voice starts speaking to you. Welcome to your first McDonald’s AI order! You’re paying way too much, but at least you’re getting this cool futuristic experience. You start to speak, and the AI cuts you off to ask what you would like. You try to ask for your burger again…and get cut off again. Now frustrated, you finally yell out your order. It’s accepted! Suddenly a receipt is printed out for $250 worth of chicken nuggets. You panic as you realize you probably aren’t gonna be able to pay your rent after all. Also, what about your Big Mac? McDonald’s wanted to stay ahead of the game, and gambled on AI being the next big leap forward for fast food stores. Instead of…good food and low prices, we guess. But nevermind. They spent one billion dollars putting AI into many of their drive-thru ordering systems, which started using the technology by 2021. And it was a complete disaster. The system didn’t work half the time. If a customer paused or had to change something, the AI would get confused. If they spoke too fast or too slow, it wouldn’t understand them. If they had a foreign accent, we’re assuming they just gave up and went to Burger King. If the system did actually process their order, it would often mess up anyway. People uploaded viral videos of the AI getting orders hilariously wrong - giving butter or ketchup instead of ice cream, and yes, in one crazy video, adding $250 of McNuggets to an order. McDonald’s stands by their decision, saying their AI program was right 85% of the time. In other words, 15% of all orders were mistakes. Actions speak louder than words, and by July 26, 2024, McDonald’s had pulled all of its AI tech systems out of its stores. This tech disaster sent some customers away, but the quality of food at McDonald’s has been turning people away for a while now. McDonald’s was never known for its amazing cuisine. But it was reliably good for fast food…and most importantly, fast. That doesn’t seem to be the case anymore. Let’s get back into the store and discover why. You finally get up to the service window to pick up your food. The employee tells you, it’s going to take a minute. So you wait…and you wait…and wait…what happened to fast food? It’s right there in the name! Finally, you give up and go park your car, telling the employee you’ll pick up the food inside to not hold up the line. Customers have been complaining about longer wait times at McDonald’s for over a decade now. One reason for longer waits is McDonald’s trying to fix the horrible, frozen food it serves. When new fast-casual restaurants - the word for restaurants that serve food relatively fast, but usually have fresher options - popped up and used fresh meat for their food, customers turned their back on McDonald’s. Young customers were especially done with the Golden Arches. To the tune of 500 million visits lost in McDonald’s since 2012. So McDonald’s decided to offer healthier options to get some younger people back in their stores. They switched from frozen patties shipped from whole states away, to fresh patties for their burgers! Well, at least for Quarter Pounders. But this threw a wrench into the whole McDonald’s food making system. It took longer to make fresh patties, and workers who had never done it before needed time to get it right. This led to 10, 15, and 20 minute waits, in a place where people expected to wait no more than three to four minutes for food. The flood of people leaving McDonald’s for places like Shake Shack and Chipotle continued to swell. Back to the endless wait. You finally hear your name called at the counter. You go, pick up your food, and sit down to eat. Might as well, since you’re already in the store. You open your mouth to take a massive bite of your juicy, delicious burger…and a wave of disappointment washes over you. This is what you paid all that money for? The fries are still delicious though, because it is the one thing McDonald’s does right. And we do mean the one thing. Getting past the “meh” taste of the burger, you finish it since you’re hungry anyway, and as you swallow your last bite, your eyes fall on the menu above the service counter. The calories of each option are listed right next to the food! You don’t remember McDonald’s doing that. And more importantly, you can’t believe how many calories you just ate! In September, 2012, McDonald’s realized its customers were getting smarter about food and paying more attention to what they were eating. So, it decided to start posting the calorie count of their menu choices. And that turned out to be a big mistake. All it did was remind increasingly health-minded people exactly how many calories they were eating with each McDonald’s meal. The Big Mac, fries, and Coke you got added up to 970 calories. With a couple of ketchup packets - no one eats fries plain, right? - round it up to 1,000. That’s half of your suggested daily calories, maybe more than half if you’re tinier than most. Just one, not that filling, and not that good burger, running 1,000 calories is A LOT. Especially with bad service. And many Americans now agree. The American Customer Satisfaction Index Organization, known as ACSI, did a survey of 15,000 customers in 2023 and 2024. They asked them about restaurants and fast food chains in the US, and of all fast food companies, McDonald’s came in dead last. People were unhappy with wait times, incorrect orders, and even more importantly, the food itself. McDonald’s also came in last compared to full-service restaurants as well. Completely disappointed by your time at McD’s, next time you’re hungry and walk by, you pause at the door, and decide to go one block over to Chili’s instead. The experience shocks you. You relax at this sit-down restaurant, with an actual server walking up to take your order and give you your food, and not only is the food the same price…but you’re getting much more of it! A McDonald’s patty is 1.6 ounces before cooking. Since the Big Mac has two, that’s 3.2 ounces of meat before cooking. A Chili’s Big Smasher burger, inspired by Big Macs, has a patty that weighs 8 ounces! You also notice there’s a lot more sauce on this burger, and it’s juicier overall. The menu says it costs $12.99 before taxes and fees - oh boy, that is pricier than McDonald’s - BUT, your waiter tells you Chili’s has a “3 For Me” deal where you can get not only the burger, but bottomless chips and salsa and a drink, for $10.99! One reviewer compared the Big Mac to a Chili’s Big Smasher burger and found that, in her Connecticut neighborhood, a Big Mac meal and a 3 For Me Chili’s deal with a burger cost the exact same amount. Only difference? The Chili’s burger was much bigger and tasted better. No wonder McDonald’s customers have left the store. Before you go grab a burger with all this fast food talk, check out McDonald’s vs Burger King- What Is The Difference? Or watch this video right here!