If you ever seen the movie The Founder about growth of McDonald’s from a regional restaurant to a national and worldwide dominance, the cost of the hamburgers was 15 cents. At that price, all income groups flocked to the restaurant and Roy Kroc could have dreams, ambitious, and the ability to grow. Over the years, prices increased and many could easily remember the advertisement 2 can dine for $5. Now days that does not buy much food. What should executives do?

In an article by Waylon Cunningham of Reuters, the increasing prices at fast-food restaurants have made people skittish down the income level, and executives said they worry about losing business from those on tight budgets.

Roughly a quarter of low-income consumers, defined as those making less they were eating less fast food and about half said they were making fewer trips to fast-casual and full-service dining establishments, according to polling in February by Revenue Management Solutions, a consulting firm.

A recent census Household Pulse Survey showed half of people earning less than $35,000 a year had difficulty paying everyday expenses, and nearly 80% were moderately or very stressed by recent price increases.

An example was a person who used to stop by McDonald’s to 2 double hamburgers, drink and fries. As prices rose the lady switched to 2 cheeseburgers and dropped the drinks. When prices rise she asks can she justify the spending?

About 1/3 of Black American households, and 21% of white American households, earned less than $35,000 in 2022, according to the latest available US census data.

For fast-food companies that often promote an image of affordability, low-income consumers are a significant portion of the customer base and a bellwether for longer-term trends. But they are typically the first to cut back spending and the last to come back.

But now, chains may be less likely to chase customers as hard as they have in the past because even with a drop in traffic, sales have remained consistent supported by increased prices.

Fast-food companies are not in a hurry to take traffic over profit as they were in a decade ago, says Mike Lukianoff, chief executive of SignalFlare,ai.

In 2008, Subway introduced the $5 footlong which became the poster sandwich for the Great Recession.

In 2016, McDonald’s after a prolonged slump in sales, introduced a bundle deal in called McPick2 allowing customers to pick 2 items for $2. Within months, Wendy’s offered 4 for $4.

Now, instead of across-the-board menu slashes and broad discounts, industry analysts say chains are being more selective, aiming them at specific demographic or limiting them to specific meal times or channels, such as its app or only through delivery.

The battleground is certainly with that low-income consumer or those earning less than $45,000 said McDonald’s CEO Chris Kempczinski.

For major fast-food companies, loyalty apps are the go-to-strategy among major brands to increase retention and the average amount of money spent. The upside for chains is they capture more transaction data and demographic data about the consumer, noted David Henkes, senior principal with Technomic.

Linking to dividend paying stocks, for all consumer companies reaching out to their customer base is a continuing challenge. For companies that try to appeal to all income groups, how to capture at least some of the purchasing power of lower- and middle-income groups is a function of value, how to give value and how the consumer feels value is shown. For the chains, as long as the next income group constantly goes to the chain, they can make profits. If you read about retail strategies, there seems to be no one answer. As an investor, you have to make a decision if you believe the company is giving good value. If no, you will need to find alternatives.

There are more questions than answers, till the next time – to raising questions.