Money blog: McDonald's to 'rethink' menu and prices as customers stay away (2024)

McDonald's is taking another look at how it prices its menu after sales fell worldwide for the first time in four years.

The fast-food giant is working on new product lines and meal deals in an attempt to entice customers back, its chief executive said.

With weary consumers skipping meals out - and ongoing boycotts over the war in Gaza - sales declined by 1% in the second quarter for those stores that were open at the same time last year.

Boss Chris Kempczinski admitted sales were likely to be down over the next few quarters too, forcing the company into a "comprehensive rethink" of pricing, the BBC reported.

"We know how to do this. We wrote the playbook on value and we are working with our franchisees to make the necessary adjustments."

He told investors that discounts would be key to ending the decline, pointing to promotions like three-for-£3 in the UK.

The last time same-store sales fell was early 2020, when the COVID pandemic forced thousands of branches to close.

McDonald's blamed the new figures on a fall in the number of its customers in the US along with the "continued impact of thewar in the Middle East" and weaker demand in China.

Mr Kempczinski defended higher menu prices by saying the costs of paper, food and staff had increased by as much as 40% in some markets.

You can read more details here...

The government has confirmed it will soon set out updated plans to regulate the "buy now, pay later" industry.

It comes after Tulip Siddiq, economic secretary to the Treasury, said last week that "regulating buy-now, pay-later products is crucial to protect people and deliver certainty".

She said the government was "looking to work closely with all interested stakeholders and will set out its plans shortly".

The Tory government first outlined plans to regulate the sector in 2021 - but the timeline for new rules to protect consumers still remains unclear.

Sky News learned last summer that the Treasuryplanned to shelve a crackdown on the sector - prompting renewed calls for action from campaigners and consumer groups.

Under BNPL regulation, companies such as Clearpay and Klarna would need to run affordability checks before signing up customers.

Borrowers with complaints would also be able to take their cases to the Financial Ombudsman Service, as well as benefiting from enhanced consumer rights.

Forecasters have had a hard time predicting both the path of interest rates and inflation this past year - and no one seems willing to put their neck on the line and speak with any certainty about what the Bank of England will do at its six-weekly meeting on Thursday.

As of this morning, market forecasts seen by Sky News puts the chances of a base rate cut from 5.25% to 5% at 58%.

This follows inflation returning to the target of 2% in recent months - down from 11.1% in October 2022.

Interest rates are hiked to ease inflation by encouraging saving instead of spending - when this happens, price rises tend to slow.

However, services and wage inflation remain higher than the Bank would like, fuelling concern that the battle with inflation is not yet over.

That's why a long-awaited rate cut - which would be good news for mortgage holders but less so for savers - seems to be in the balance.

Economists polled by Bloomberg this week came out just in favour of an August cut rather than September.

"The Bank of England's August policy decision is on a knife edge. It's hard to have a strong conviction about the outcome of the August meeting but, on balance, we think a cut is more likely than a hold," say Dan Hanson and Ana Andrade, from Bloomberg Economics.

One thing analysts do seem to agree on is that it will be a drawn out process to return the base rate to 4% or 3%, where it is expected to eventually settle.

Sonali Punhani, UK economist at Bank of America, said: "The BOE is unlikely to give clear guidance on the future rate path or signal the start of a sustained cutting cycle.

"It would keep the focus on the data to determine the timing of the next move."

According to Bloomberg, investors have only priced in two quarter-point cuts this year, with Bank economists Huw Pill,Jonathan HaskelandCatherine Mann pointing out lingering price pressures, particularly in services inflation and wage growth.

Are you struggling because of high interest rates? Sky News is keen to hear from people who are due to refix their mortgages, are on variable rates or are trying to get on the housing ladder.

Email us your stories atsky.today@sky.ukor use the box at the top of this page.

Lloyds Bank's £175 switching offer closes tonight - so new and some existing customers will need to be quick to complete a move using the Current Account Switch Service (CASS).

The service swaps all direct debits and standing orders.

Anyone interested must open a Club Lloyds account online, by phone or in branch - then switch at least three active direct debits.

There are three accounts - one for £3 a month, one for £10 and one for £21. They include various benefits from savings rates and TV subscriptions to travel insurance and breakdown cover. You can find out more here.

It's worth noting that if you've already received switching cash since April 2020 when moving to Lloyds or Halifax, you're ineligible.

You have an extra day if you're looking at First Direct's £175 offer - this closes a midnight on Wednesday.

Again, you have to use CASS. For this one, you need to have at least two direct debits or standing orders - and you must deposit a minimum of £1,000 and register for digital banking within 30 days. The other stipulation is you need to use your debit card at least five times during the first 30 days of opening your account.

This one is for new customers only.

Incentives include: a £250 interest-free overdraft, fee-free overseas transactions and ATM withdrawals, plus access to a 7% interest regular saver account.

Find out more here.

Barclays also has a £175 switching offer, while Co-op will give you £100 plus £10 cashback for six months and an insurance package.

Greggs has admitted prices have been hiked in the last few weeks - and has blamed soaring wage bills.

Confirming what many people have been tweeting about in recent weeks, chief executive Roisin Currie told the PA news agency some items were up 5p and 10p - but the meal deal is unchanged.

Ms Currie said the company had acted to offset higher pay for its 32,000 staff, having raised salaries earlier this year ahead of the increase in the National Living Wage.

She said: "The biggest inflation cost right now is the increase in the National Living Wage and making sure our employees get the wage increases that are appropriate.

"That puts pressure on the cost increases within the business."

This emerged as the group reported a 16.3% rise in underlying pre-tax profits to £74.1m for the six months to 29 June.

Greggs says it remains committed to its long-term aims to have "significantly" more than 3,000 shops across the UK, having opened 99 new shops and closed 18 to reach 2,524 in the first half.

It is planning to open up to 160 new shops net this year as a whole.

By Daniel Binns, business reporter

BP is among the top gainers on the stock market this morning after it reported higher-than-expected profits of more than £4.2bn for the first half of the year.

The oil giant was up more than 2% in early trading following the publication of its latest results.

The FTSE 100 firm also said it would increase its dividend for shareholders by 10%.

However, critics reacted with outrage to the figures as they accused BP of not caring about the impact of its business on climate change.

Fiona Waters, from energy bills campaign group Warm This Winter, described the profits as "obscene".

She added: "They have rolled back on their green pledges that would mean lower bills, an end to energy price shocks and would also help save the planet."

A spokeswoman for fellow campaign group Global Witness added: "While millions of us struggle with high temperatures and high bills, BP are raking in billions of profits, paying out massive dividends, and doubling down on dirty new oil and gas projects."

Yesterday, the chancellor announced the windfall tax on the profits of energy and gas companies would rise 3%, to 38%, from November.

On the flipside of the FTSE 100, shares in drinks giant Diageoplunged more than 10% on Tuesday.

It comes after the companyreported a steeper-than-expected 4.8%decline in annual organic operating profit in its preliminary results for the year ending June.

The company blamed "an unfavourable foreign exchange impact and organic net sales decline" but said it was confident it would return to growth when the"consumer environment improves".

Overall, the FTSE 100 is down 0.68%, while the FTSE 250 is up 0.79%.

On the currency markets, this morning £1 buys $1.29 US or €1.19.

Meanwhile, despite tensions in the Middle East, the cost of a barrel of Brent Crude oil is just below $80 (£62), a slight fall on this time yesterday.

Evri is to hire 9,000 new staff in the UK following its multi-billion pound takeover.

The delivery giant said it is looking to employ 8,000 more couriers, along with around 1,000 warehouse and other supporting roles.

The company said key locations selected for the new jobs included Scotland, Bury St Edmunds in Suffolk, Plymouth in Devon and alsoGatwick Airport.

Couriers typically earn around £16.50 per hour, according to Evri.

Read the full story here...

For the first time, finance leaders from every G20 country have agreed to tax the world's billionaires.

Treasury ministers and central bankers from the group of 20 major economies agreed to reference fair taxation of "ultra-high-net-worth individuals" in joint statements after meetings in Brazil.

But an agreement to team up on taxing the world's richest families papered over disagreements about how to do it, raising fears about how viable the plan is.

Read the full story here...

NatWest has said it "welcomes" the government's commitment to returning it to full private ownership after the chancellor announced she was scrapping a retail share sale in the high street bank.

Rachel Reeves said the plans, announced by the previous Conservative administration, were a "bad use of taxpayer money" and suggested the bank's remaining state-owned stock would now be sold off to large, institutional investors instead.

Read the full story here...

Basically, a mortgage broker is a person or company that sorts out a mortgage deal between you and the lender.

They can help you seek out the best option for your situation and apply on your behalf, doing the legwork so you don't have to – including gathering paperwork and passing it along.

A mortgage broker will likely earn a commission from the lender, and possibly the borrower as well, at closing – although some offer their services to buyers for free.

Mortgage brokers, unlike mortgage bankers, don't use their own funds to originate the mortgages.

How do they work?

Mortgage brokers use a system where they can access some or most of the deals being offered on the market by lenders.

Based on their client's budget and type of property they're looking for, the broker can tell them which lenders are likely to accept them and recommend deals they think are most suited.

Factors that brokers will look at when recommending a mortgage include the size of the buyer's deposit, how long they are looking to fix for, interest rates and other personal information such as credit history and outgoings.

What are the benefits of using a broker?

You don't have to use a mortgage broker to secure your mortgage - if you're feeling confident enough, you can go to lenders directly.

But a broker could end up saving you money by finding you a more favourable rate or making a recommendation that's better for you financially. You may also end up getting access to more products than you would through your own research.

Brokers also have expertise in the mortgage market which the average person doesn't - so they'll be able to advise which mortgage would work best for their client at that time.

Another biggie is the convenience. Trawling through all the deals being offered by different lenders yourself can be a tedious job, but a broker can cut out all of this work for you.

What are the downsides?

You're not guaranteed to get a better rate through a broker - and if they charge you a fee at the end, you may end up being more out of pocket than you realised.

Some brokers may only work with certain lenders, meaning they don't have access to the whole market.

And while a reputable broker will be able to offer a good range of the best deals from the biggest names, some may be incentivised to steer borrowers towards certain lenders or loans that offer them a higher commission.

Read other entries in our Basically series...

Rachel Reeves, the new Labour chancellor, said yesterday the Treasury had identified a "forecast overspend" for this year of £21.9bn.

As a consequence, she announced cuts worth £5.5bn this year, rising to £8.1bn next year.

The measures impacting your personal finances include:

• Winter fuel payments will be scrapped for around 10 million pensioners - those not receiving means-tested benefits;
• A £86,000 lifetime cap on social care costs, due to start from October 2025, has been postponed. There is currently no cap;
• The manifesto pledge to charge 20% VAT on private school fees will kick in from January 2025;
• The Labour plan to replace the non-dom tax status will be implemented fromApril 2025;
• The windfall tax on the profits of energy and gas companies will rise 3%, to 38%, from November;
• Ms Reeves also hinted at potential tax rises - or "difficult decisions" - in her October budget, though not income tax, national insurance or VAT.

We also learned yesterday that:

• The chancellor had accepted advisory recommendations to give most NHS workers, teachers and members of the armed forces above-inflation pay rises of 5.5-6%;
• The government has offered striking junior doctors in England a pay deal - over two years - of 22%.

Want to know more? Business correspondent Paul Kelso is at the Sky News screen to take a deeper dive...

After the revivalof popular Cadbury's chocolate bar Top Deck earlier this year, we asked you which discontinued treat you would like to see brought back - and we got so many responses that we've decided to make a weekly feature of it calledBring It Back.

Every Tuesday, we'll pick one from our comments box and look at why it was so beloved and, crucially,find out whether the companies in question might consider reintroducing them.

This week, we take a look at Tooty Frooties.

First launched in 1963 by Mackintosh (which became Rowntree Mackintosh a few years later), the purple bags of sweets quickly became a hit with children and adults alike.

Chewy, and fruit-flavoured and with crunchy, multicoloured shells, the product could be considered somewhat of a precursor to Skittles.

Such was their popularity that spin-offs including the shortlived mint-flavoured version called Tooty Minties and even a Tooty Frooties Easter egg was introduced to the market.

However, as sweet trends shifted towards jelly and foam textures, sales of the original product waned - and it was finally axed in 2019.

Kelly Francis was among those who continues to mourn the loss of the confectionary.

"I will never understand why they got rid of Tooty Frooties," she lamented.

"They were levels above any other sweets you can buy.

"There was something really special about the chewy, fruitiness with the crunchy shell on the outside. There is barely a week that goes by when I don't think about them."

But will they ever return to the shelves of your local corner shop or supermarket?

We asked Nestle, which took over Rowntree's in 1988.

"Rowntree's Tooty Frooties were launched in 1963 and delisted in 2019 due to changing consumer preferences," a spokesperson said.

"Of course, sweet tastes and trends change all the time, and while there's no plan to bring back Tooty Frooties, Rowntree's has launched several exciting new products in the past years and has some more new offerings in development for 2025 – so watch this space."

So while it may not be exactly the news lovers of the classic sweet wanted, there is at least some hope that at least one of the products being worked on by the confectioners goes some way towards filling the fruity, chewy and crunchy hole left in their lives by its absence.

Which currently discontinued chocolate bar, crisps, sweets - or any other food product - would you like to see brought back, and why? Let us know in the comment box at the top!