The JUST Report: How Companies are Easing the Pain for Lower Income Customers
“Particularly with middle- and lower-income consumers, they’re feeling under a lot of pressure right now.”
That worrying statement comes from McDonald’s CEO Chris Kempczinski, who earlier this week sat down with Fortune for a conversation on the state of the business. Going further, he relayed that traffic among these demographics is down double-digits, with low-income consumers skipping breakfast in particular.
Other indicators are also concerning. This week brought a dismal jobs report (the first time in four years the economy lost jobs). A new Federal Reserve Bank of New York poll shows that people’s confidence in their ability to find work if they lose their job is the lowest it’s been since they started polling in 2013. They also suggest lower-income households have already begun to change their shopping habits to withstand economic uncertainty.
How are companies responding to help their less well-off customers?
McDonald’s itself is currently cutting prices on certain food combos and offering limited time deals to help customers feeling the pinch. Other chains are making similar attempts,such as Domino’s recent “Best Deal Ever” promotion, which offered any pizza toppings for $9.99.
Other industries are also following suit. FanDuel gave $80,000 to restore Philly’s Septa train service for the Eagles’ season opener after the city officials said it would have to cut express service thanks to budget shortfalls. Grocer Aldi cut prices on 400 everyday items over the summer to offset rising food costs; energy companies (including Eversource) provide eligible customers with up to a 50% monthly discount on their electric bill and flexible payment plans; and earlier this year Target dramatically expanded their healthcare products under $10 to make health and wellness purchases more budget-friendly.
As more and more Americans become squeezed financially, we will surely see more efforts by just companies to ease the pressure.
We will be tracking them.
-Martin
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