Still more signs of consumer exhaustion are evident in tactics by McDonalds, Starbucks, and other chains’ attempts to woo back customers who said no more to rising prices.

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Free Fry Fridays and A $5 Meal Deal

Quartz reports McDonalds Introduces Free Fries Fridays to Win Back Inflation-Weary Customers

McDonald’s announced Thursday that customers who spend a minimum of $1 on Fridays will receive free fries with their order, as part of its effort to win back inflation-scorned customers.

“We heard our fans loud and clear — they’re looking for even more great value from us, and this summer that’s exactly what they’ll get,” Joe Erlinger, President of McDonald’s USA, said in a statement announcing the initiative.

The Chicago-based fast-food giant said that the french fry deal is only for customers with the McDonald’s app, which is free to download, and will run through the end of 2024.

It also said its much-hyped $5 deal will begin on June 25, allowing customers to order a small fries, 4-piece Chicken McNugget, a small soda, and choose between a McDouble or McChicken sandwich for just $5. That deal is scheduled to run through the summer at select locations.

Price Wars

Also note Amazon, Walmart, and Big Retail’s Race to Cut Prices

Amazon, Walmart, Target, and others are all duking it out with discount deals — and with each markdown, they hope their bargain will be the one to win over inflation-weary consumers. While some retailers say they’re cutting prices to give shoppers deals, the efforts clearly align with the companies’ needs to offset declining sales as inflation remains elevated. In recent weeks, a slew of quarterly earnings reports and other company announcements have underscored the extent to which customers are chasing deals and how quickly retailers are taking action.

“Retailers respond when consumer sentiment seems to hit a tipping point,” said Jerry Sheldon, vice president of technology at the market research firm IHL Group, referring to inflation’s impact on American families. “The entire supply-demand and cost sensitivity tipping point is quite fragile it seems, and no retailer wants to be positioned as a price outlier from their self-defined peer group.”

Wait a second. Didn’t economists tell us wages were rising faster than prices? If so why don’t consumers have more to spend?

Starbucks Woos Customers With Major Deals

And for the first time in years, Starbucks Woos Customers With Major Deals

In an attempt to rebuild slumping customer numbers Starbucks is now offering a selection of special deals – a promotion the popular coffee chain has avoided for decades.

The Seattle-based operator is currently offering several promotions, including discounts, buy-one-get-one-free deals and supersize perks for loyalty customers.

Starbucks has long marketed itself as a premium coffee chain, though its prices tend to be on the high side, something that has not been helped by surging inflation in the US – resulting in more Americans opting to eat at home or ditch special treats.

A grande Caramel Frappuccino is typically listed at around $5.65 on the chain’s menu, though a single iced coffee with extra syrups and foams can cost around $10 at full price.

According to Starbucks, its traffic dropped 7 percent in the three months ended March 31 from the prior year, the biggest quarterly decline since at least 2010. Its active loyalty-rewards users decreased by 1.5 million between December 31 and March 31.

Earlier this month, for the first time in more than a decade, the chain began offering bundles of coffee and breakfast food starting at $5. “50% off a drink. It’s on,” Starbucks said in a recent email to customers. “Keep checking the app all summer for more deals heading your way.”

A $5 meal deal at Starbucks too, fancy that. I cannot comment on meal deals at Starbucks because I have never been to one.

However, I can ask: How many people think as I do that McNuggets are inedible pieces of fried fat?

Returning to Starbucks, even if I did drink coffee, I would not pay $10 for it.

McRib Flashback

On February 2, 2013, I commented Yum! The McRib is Back, Get Yours Today (After You Find Out What’s In It); The Secret’s in the Sauce!

McDonald’s McRib is famous in some circles for utilizing what’s known as ‘restructured meat’ technology. Since McDonald’s knows you’d never eat a pig heart, tongue, or stomach on your plate, they decided instead to grind up these ingredients and put them into the form of a typical rib. That way, consumers won’t know what they’re putting into their mouths. As the Chicago Mag reported, the innovator of this technology back in 1995 said it best:

“Most people would be extremely unhappy if they were served heart or tongue on a plate… but flaked into a restructured product it loses its identity. Such products as tripe, heart, and scalded stomachs…”

So in other words, it’s not actually a rib. Instead, it’s a combination of unwanted animal scraps processed down in major facilities and ‘restructured’ into the form of a rib. Then, 70 additives, chemicals, fillers, and GMO ingredients later, you have a ‘meat’ product that tastes like ribs.

I sure hope that whets your appetite, because as we all know “Parts is Parts”.

By the way, I have no idea what Wendy’s did to their chicken sandwich but whatever it was, they ruined it. The new batter tastes like Elmer’s glue.

This happened in 2020 when it replaced the Homestyle Chicken Sandwich with the Classic Chicken Sandwich. But other than the now inedible coating, at least a Wendy’s chicken sandwich is still one part.

Breadsticks at Olive Garden Highlight Financial Strain on America’s Middle Class

In case you missed it, please see my June 20 post, Breadsticks at Olive Garden Highlight Financial Strain on America’s Middle Class

Traffic at Olive Garden is up 3.9 percent but but same store sales are down 1.5 percent. Are people filling up on unlimited breadsticks? Drinking less wine?

Retail Sales Were Very Weak in May Counting Negative Revisions

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Nominal and Real (inflation adjusted by the CPI) retail sales chart by Mish.

On June 18, I commented Retail Sales Were Very Weak in May Counting Negative Revisions

If someone tell you the consumer is strong, please have them read this post. The strong consumer is all a mirage of inflation.

Discretionary Spending

All of the articles in this post have one thing in common. They are all about discretionary spending.

Consumers are tapped out and that is the first, if not only thing consumers can cut back on.

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