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As More Customers Ditch McDonald's, Others Are Flocking to Taco Bell—Here's Why

Taco Bell is seeing major success with a group of consumers that McDonald's is struggling to retain.
FACT CHECKED BY Justine Goodman

Boasting higher sales than any other chain in the United States and a whopping 40,000 restaurants throughout the globe, McDonald's remains a major powerhouse in the fast-food industry in 2024. But despite McDonald's continued dominance, one of its major fast-food competitors is growing increasingly popular with a key group of consumers who are ditching the Golden Arches to eat at home.

Yum! Brands—the parent company of Taco Bell, KFC, Pizza Hut, and the Habit Burger Grill— just released its results for the fourth quarter of 2023 and the full year. During a Feb. 7 earnings call where company executives discussed the results, Yum! Brands CEO David Gibbs revealed that Taco Bell soared in popularity among lower-income consumers throughout 2023. In both the fourth quarter and the full year, Taco Bell's restaurants in low-income areas outperformed the rest of its business.

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"I think that speaks to the strength of Taco Bell in this environment. It is a value leader in so many ways," Gibbs added.

Taco Bell's success with lower-income consumers in 2023 was in stark contrast to McDonald's performance. McDonald's released its own results for the fourth quarter of 2023 and the full year on Feb. 5 and subsequently revealed in an earnings call that lower-income consumers have been visiting its restaurants less and less because eating at home is more affordable. McDonald's CEO Chris Kempczinski also noted that when these lower-income guests do dine at McDonald's, they aren't ordering as much or they're opting for less expensive menu items.

McDonald's burger
Photo: Eliz A / Shutterstock

Kempczinski's takeaways echo recent consumer discussions about McDonald's on social media. The chain's prices have steadily ticked up in recent years, including a roughly 10% increase in prices throughout 2023. Scores of McDonald's customers have taken notice of these price hikes and have been slamming the chain due to the decrease in affordability.

Just last week, consumers sounded off against McDonald's on X (the social media site formerly known as Twitter) in response to a report that a rest stop location in Fairfield, Conn., was charging a whopping $7.29 for one Egg McMuffin sandwich.

"I don't eat [at McDonald's] because the price is outrageous," one X user commented.

Kempczinski said this week that McDonald's will work to entice lower-income consumers back to its restaurants by focusing more on "affordability" in 2024. Ian Borden, McDonald's executive vice president and CFO, also indicated that McDonald's price increases will likely slow down this year as inflation continues to ease. However, only time will tell if these efforts will improve McDonald's standing with the lower-income customer segment.

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To be fair, Taco Bell has also faced its fair share of complaints about higher prices and lower affordability in the past year. Just last month, Taco Bell customers criticized the chain heavily on Reddit after noticing that the fan-favorite Cheesy Bean and Rice Burrito—which is notably featured on the chain's new value menuhad shot up in price in certain parts of the country.

But despite these criticisms, the latest results show that Taco Bell isn't struggling to bring lower-income customers into restaurants in the way that McDonald's is struggling.

"Certainly, for Taco Bell,…it looks like we're doing a great job of holding on to them," Gibbs said of the consumer segment during the Feb. 7 earnings call.

Zoe Strozewski
Zoe Strozewski is a News Writer for Eat This, Not That! A Chicago native who now lives in New Jersey, she graduated from Kean University in 2020 with a bachelor’s degree in journalism. Read more about Zoe
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