Jul 29, 2024 3 min read

Big Mac Confirms Weak Global Economy Is Facing More Deflation

Big Mac Confirms Weak Global Economy Is Facing More Deflation
Photo by Annie Spratt / Unsplash

Consumers around the world have cut back on buying Big Macs at McDonald's. The company reported its first worldwide sales decline in 13 quarters today. The company's CEO said, "Consumer sentiment in most of our major markets remains low." Yet, the stock price rose nearly 4% today after the company said that its $5 meal deal is a big hit and will be extended.

Other retailers have also announced price cuts to bolster their sales. Target, Walmart, and Aldi have lowered prices on food and other household staples. Burger King and KFC have also introduced $5 meal options. In addition, Amazon, Walgreens, and Best Buy have announced price cuts. 

These deflationary pressures will require retailers and their vendors to work even harder to use technological innovations to boost productivity and to cut costs. (That's especially true in California where the minimum wage at most large fast-food restaurants was raised to $20 an hour on April 1.)

Confirming the global slowdown are recent deflationary trends in commodity markets. Both the price of copper and crude oil have been weak recently (chart). They are both very sensitive indicators of global economic growth.

Great! You’ve successfully signed up.
Welcome back! You've successfully signed in.
You've successfully subscribed to Yardeni QuickTakes.
Your link has expired.
Success! Check your email for magic link to sign-in.
Success! Your billing info has been updated.
Your billing was not updated.