McDonald’s Admits to Major Failure — Here’s How You Will Benefit

It has been a shaky year or two for the fast-food industry. If you have gone through the drive-thru lately, you have likely noticed the prices are a lot higher than they used to be.

Now, those inflated prices are coming back to bite the largest fast food chain in America.

McDonald's just admitted that its food is too expensive, which has led to falling sales at the fast-food beast. Recently, they tried to get a handle on the situation by trying out temporary $5 value meals. These used to be somewhat of the norm and were very popular.

McDonald's CEO Chris Kempczinski told investors on July 29 that "external pressures" had affected business — there's been a broad slow-down on fast-food shoppers in general.

"But there were also factors within our control that contributed to our underperformance, most notably our value execution," he says.

READ MORE: What It Means if You See a McDonald’s With Black Arches Instead of Yellow

The CEO notes that they had put their rising costs burden due to inflation on the customers, and the customers hit back by not buying McD's.

According to Yahoo Finance, global comparable sales decreased 1 percent year-over-year in the quarter, including a 0.7 percent drop in the U.S. Systemwide sales also fell 1 percent.

While 1 percent may not sound like a lot for a company that sells as much as McDonald's, that 1 percent means a huge dip in profit because of their size.

Basically, McDonald's knows that a lot of its patrons are lower-income households, and that they made it nearly impossible for these folks to afford a dinner at the fast food giant. That's a problem.

Adds McDonald's CFO Ian Borden: "I think it's not even so much about consumers moving from us to others, it's about consumers in that low-income category and I think families, which are obviously two big cohorts of our consumer base across most of our markets, just eating out less frequently than they have been previously."

Will McDonald's Lower Its Prices?

McDonald's execs don't sound optimistic about future consumer spending in the fast-food industry in general.

"We expect customers will continue to feel the pinch of the economy and a higher cost of living for at least the next several quarters in this very competitive landscape," Joe Erlinger, president of McDonald's U.S., says.

This will benefit you, the consumer, as McDonald's will now re-evaluate its pricing strategy to get more people back into their locations, and get sales back up to par.

The short answer? They'll have to drop costs of food permanently.