McDonald’s CEO issues grim warning and blames store change – but he insists ‘exciting’ update will draw customers back ...Middle East

A MCDONALD’S boss has shared a worrying financial warning after a huge in-store adjustment.

But the employer – who runs seven McDonald’s restaurants – has applauded exciting meal news to attract more diners.

Mike Keung, whose family owns a chain of McDonald’s restaurants throughout Los Angeles County, told KTLA that “business is tough.”

He’s witnessed a 16% dip in gross sales and customer visits compared to this time last year.

Keung said that cash-strapped customers have told him “they don’t want to leave their home” even though his restaurants haven’t “increased prices as much as many of our partners.”

The broadcaster spoke to him more than a year after California hiked the minimum wage for fast-food employees from $16 to $20 per hour.

KTLA said that major franchises, including McDonald’s, Subway, Chipotle and Burger King, have recently raised menu prices to “protect their bottom line.”

This follows the contentious passing of a new law, Assembly Bill 1228, despite firms warning the legislation would increase consumers’ costs.

Keung said the bill has “definitely had a huge impact on our operations.”

The biggest repercussions have been on staff numbers since it was signed into law by Governor Gavin Newsom in September 2023.

Prior to its passing, Keung had employed about 413 employees across his seven restaurants, but “now, I’m down to 384 the past year,” he added.

However, the flip side is that loyal employees are remaining at the chain for longer.

He said, “Prior to April, I had an 85% turnover rate, and it’s been cut in half, down to about 40% turnover for the last year.

“So, the employees we have are staying.”

His McDonald’s restaurants are also seeing a 40% spike in job applicants – and they have even been “hiring teachers who are looking for second jobs,” he said.

There’s a lot of excitement coming in the next two weeks that I can’t talk about yet

The CEO added, “We’ve also hired people from the packaging industry, like FedEx and UPS, looking for second jobs on the weekends or after school.

“These types of employees are a huge benefit to our organization because they bring maturity.”

CHEAP MEALS DEALS

Also, diners are loving the chain’s new value meal promotions – with more budget-friendly deals being added to the 2025 menu, according to company CFO Ian Borden.

These include deals such as the popular $5 meal deal and a buy-one-get-one-for-$1 offer.

The cheap meals “definitely bring in additional customers,” said Keung.

Fast Food meal deals

Here are some of the current value meals offered by popular fast food joints.

Taco Bell’s $7 Luxe Cravings Box:

McDonald’s $5 Meal Deal:

Wendy’s $5 Biggie Bag:

Burger King’s $5 Your Way Meal:

He also hinted at fantastic dining news for fans, “McDonald’s is trying to bring in new items this year.

“There’s a lot of excitement coming in the next two weeks that I can’t talk about yet.

“We’re trying to offer more products that hopefully more customers can enjoy.”

WAGE HIKE FIGHT

Last September, California’s local restaurant owners banded together to warn officials that they “can’t survive an additional wage increase.”

In a joint letter to the California Fast Food Council – which has regulatory power over the industry – they warned “the $20/hour minimum wage is projected to cost local restaurant owners as much as $250,000 per restaurant, per year.”

I thought the saddest part of the interview was him hiring teachers who are looking for second jobs

The letter added, “We are writing to express our strong opposition to any further wage increases by the Fast Food Council this year or in 2025.

“An additional wage increase would once again unfairly single out our livelihoods and cripple thousands of small business owners like us who are already struggling to survive the $20/hour minimum wage, our customers, and our employees.

“We strongly urge the Council to reject any additional wage increases for fast food workers.

“It would undoubtedly force many more local restaurants out of business, cause more fast food workers to lose their jobs, and further increase food prices for families.”

But Newsom said the measure was introduced to give the area’s more than 500,000 fast food workers greater power and job protection.

KIOSKS REPLACE STAFF

After KTLA posted about the interview with Keung on Facebook, there wasn’t much sympathy from viewers.

One said, “Dude owns 7 McDonalds he’s gonna be fine [sic].”

Another replied, “It’s not affecting him at all. The consumer gets affected.

“That’s why your ‘value meal’ is now over $15. Mike has also installed electronic kiosks for ordering thereby lowering his labor cost as well. Mike is doing just fine.”

But, one person wrote, “I thought the saddest part of the interview was him hiring teachers who are looking for second jobs.

“Imagine working 9 hours with kids and then showing up for an evening shift flipping burgers.”

Keung warned that the passing of AB 1228 meant that it was much tougher to financially support local initiatives including charities and fundraisers.

He also pointed out that hundreds of McDonald’s franchises in Southern California are family businesses “that invest in local communities and are great partners.”

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