What McDonald’s sales trends show

/ Carlos Carmonamedina for NPR Public Editor

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Carlos Carmonamedina for NPR Public Editor

Is the economy good or bad? It depends on whom you ask, or what the algorithm feeds you, or which news outlets you prefer. There are longstanding chicken-or-egg questions about journalism and the economy: Does a negative take on economic news make consumers more pessimistic? Or do pessimistic consumers inspire journalists to do more negative stories?

I’ll tell you right now that no one really knows the answer to that question, but the people who study this stuff show a slight preference for the latter theory, that public perception sways journalism more than vice versa.

With that conversation in the background, we are addressing a listener question that comes via an economist and critic who challenged a recent two-minute long story about a 1% drop in sales at McDonald’s.

The economist critiqued the story’s frame, which blamed inflation for the decline. (The average price of menu items at McDonald’s is up by 40% since 2019.) The economist pointed out that McDonald’s profit margins are also up since the pandemic. He implied that corporate greed, not inflation, is the real culprit.

To sort this out, we reached out to the correspondent and to a different economist for another perspective. Read on to hear from them both. And we spotlight the latest episode of The Sunday Story, about a year-long investigation into abuse at a juvenile detention facility. — Kelly McBride

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Illustration by Carlos Carmonamedina

Fewer people are eating at McDonald’s, what does that tell us?

The All Things Considered story focused on the recent sales drop at McDonald’s for the first time since restaurants shuttered their doors due to the pandemic in 2020.

In the two-minute story, NPR business correspondent Alina Selyukh quickly summarized the trend: “People are scaling back on going out to eat because of inflation. Prices at restaurants keep rising faster than at the grocery store. In fact, some grocery prices are declining, while a fast food dinner is double digits.”

Selyukh noted that the company’s executives said the push to market new bargains is initially drawing back consumers.

Dean Baker, senior economist at the Center for Economic & Policy Research, posted a thread on X about the story, saying: “NPR does serious journalistic malpractice with its McDonald's losing business story.” The story seemed to imply evidence of a bad economy when it should have focused on how McDonald’s finally hit a ceiling on its price increases, which is ultimately a good thing for consumers, he said.

Selyukh told us the idea for this story was prompted by a recent McDonald’s earnings report, which she regularly tunes into, along with several other major corporations’ earnings calls, to look for changes in patterns.

“In this particular case, this was pretty straightforward news to me because McDonald’s is a quintessential American restaurant that is the largest restaurant chain in the world,” Selyukh said.

She said in hindsight, in addition to reporting the fast food company’s drop in sales, she should have also noted McDonald’s profits in the All Things Considered story as she did in her short report for the July 29 Newscast when she said: “The company still made money in the quarter because of higher prices, but its next focus is to bring customers back into restaurants.”

Selyukh also wondered whether exchanging the word “inflation” for “higher prices” would have changed some audience members’ perceptions. For instance, the headline would have read, “McDonald’s is losing customers to higher prices.”

Ernie Goss, an economics professor at Creighton University, told us that the story was correct in implying that inflation is having more of a negative impact on low- and middle-income earners, who are the largest demographic of McDonald’s clientele, a trend he doesn’t see subsiding soon. Many factors are contributing to McDonald’s declining sales, he said, including federal pandemic relief running out, wage increases for its workers and automation not having as many positive effects as anticipated.

“I thought it was a good story, but it’s like most economic issues — it’s hard to pack that into a one-minute, two-minute, three-minute slice,” Goss said.

He disagrees with the sentiment that McDonald’s is taking advantage of consumers through greedy price increases since the onset of the COVID-19 pandemic.

“If it’s that simple — if you can just raise prices without consequences, then why wasn’t McDonald’s doing it earlier?” Goss said. “The reason they’re doing it now is their gross profits have been reduced because of the cost of inputs, cost of labor and the value of the dollar increase.”

Goss pointed out that McDonald’s sales can be an indicator of the fast food industry collectively. Many of its competitors, like Burger King, are owned by conglomerates and don’t have a stock price directly tied to their brands, yet they experience similar challenges.

The McDonald’s story was just one of many where NPR has sought to explain inflation impacts. NPR’s chief economics correspondent Scott Horsley reported stories for All Things Considered and Morning Edition about inflation falling to its lowest level in more than three years in July, yet some Americans still feel crunched with their budgets.

“Even though inflation has come down a lot, many people are still frustrated with the cumulative effect of price increases over these last three years,” Horsley said on All Things Considered.

Baker, the economist at the Center for Economic & Policy Research, took issue with NPR’s framing. “NPR tells us that even though inflation is falling many people are still suffering and puts two of them on the air,” he posted on X about the All Things Considered story. “That is an editorial choice.” He added that, “NPR and other media outlets have opted to regularly give us the assessments of those who are struggling and not the views of those who are doing well.”

His point is interesting, and it’s worth considering how journalists might offer a better picture of Americans who are doing well in these economic conditions. They already do this to an extent, of course. In a story on falling mortgage rates on Aug. 8, Horsley wrote: “Many people with more expensive home loans hustled to take advantage of the falling rates.” Ultimately, NPR’s job when covering the economy is to show the nuanced ways Americans are affected by the current market.

“Our team spends a lot of time talking to regular folks about their budgets and how they are allocating dollars, for instance in my story, away from some restaurant outings because restaurant prices have gone up,” Selyukh said of another story she wrote following up from the McDonald’s earnings report.

As Selyukh acknowledged, more details about the McDonald’s profits for All Things Considered could have given the audience one additional piece of key context in her two-minute audio story on the McDonald's sales decline. The full story is that some fast-food consumers are suffering, that’s showing up in the traffic decline at the sales register, but McDonald’s profit margins are just fine.

By noting that this was the first sales decline for the fast food company since the start of the pandemic, the reporter did imply that the company’s books were strong, even if she didn’t say how strong. The premise of this story – that fewer people are eating at McDonald’s – is still newsworthy. — Emily Barske Wood 

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A local station reveals patterns of abuse at state facility for kids

The Sunday Story this past weekend featured a conversation between NPR’s Ayesha Rascoe and New Hampshire Public Radio’s Jason Moon about his team’s year-long investigation into New Hampshire's main juvenile detention facility – known as the Youth Development Center. There are about 1,300 people who have filed lawsuits, alleging physical, sexual and psychological abuse at the center known as YDC. Moon spoke with Rascoe about undertaking this investigative story and the difficulties of reporting on a secretive system. We hear the voice of one man who had been incarcerated in the Center, as he shares a harrowing story from his experience at the center, and of a former staff member. You can listen to NHPR’s podcast, The Youth Development Center, here. It is a sobering story about power imbalance, and a solid reminder of the need for more investigative journalism to shed light on injustices and abuse against children. — Amaris Castillo

The Office of the Public Editor is a team. Reporters Amaris Castillo and Emily Barske Wood and copy editor Merrill Perlman make this newsletter possible. Illustrations are by Carlos Carmonamedina. We are still reading all of your messages on Facebook, X and from our inbox. As always, keep them coming.

Kelly McBride
NPR Public Editor
Chair, Craig Newmark Center for Ethics & Leadership at the Poynter Institute

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