[Industry Talk Time] CEOs of Walmart & McDonald’s Discuss Global Consumer Trends This Week

CEOs of the leading American multi-national companies Walmart and McDonald’s both broke the headlines this week. You can see the CNBC headlines in the article links below:

• “Walmart CEO says consumers may not be as resilient next year, even as deflation starts to show”
• “McDonald’s to open first CosMc’s spinoff restaurant this week”

First, Walmart. During this upcoming holiday season, the resiliency of the US consumer will be tested along with ongoing global economic issues, such as inflation, and what the effects will have on global consumer spending trends in 2024.

Deflation is going to be a hot topic for the global consumer spending trends going into 2024, and as the food and energy prices decline, it will be interesting to see how US consumers spend their money. But another aspect of this deflationary situation is the fact that US consumers have been spending less money from debit purchases while using up more of their credit balances.

Here’s what Walmart CEO Doug McMillon said about it:

“It’s going to be interesting to watch what happens in the general merchandise categories in the year ahead because prices are so much lower…We’d rather have lower prices than higher prices.”

That last comment is literally a trademark of the Walmart brand: Everyday low prices.

But in recent years Walmart has revamped its storefront to meet the changing consumer behavior trends during and following the global Covid-19 pandemic. As you can imagine, the Walmart parking lots started seeing an increase of stop-and-go traffic due to services connected to the Walmart+ platform, which was launched in the middle of the global pandemic.

Walmart also responded to the pandemic by closing stores earlier and focusing more on its labor issues while also giving consumers more options to purchase their items through at-home and curbside pickup channels.

“Customers, generally speaking, are really price-sensitive right now. They’re prioritizing their orders and they know that there’s a chance that the prices might be lower right before Christmas, or right after Christmas with clearance, and so that’s what we expect to happen.”

As for the price points, it will be key to Walmart’s strategy to push into more global markets, such as India and South Africa. There are some other valuable reasons for why companies such as Walmart are deciding to stop change their strategies according to global market trends

Walmart is also one of the latest company to announce spending cuts for X advertising, since Elon Musk’s comments about a antisemetic conspiracy theory has caused other companies, such as Disney, to pull its advertising spending from X.

In response to allegations that Walmart is follwing suit with others such as Disney, the company’s executives have been brief, but firm, about why the company has decided to pull advertising from X. You can read more about what happend between Walmart and Elon Musk in this edition of the [Industry Talk Time].

Next, McDonalds. CNBC released a video about the CosMc’s spin off brand of McDonalds which has been in talks for a while. In a first look at the CosMc’s brand, a CNBC video production captured all of this restaruant’s advanced features. The first location will be opened in Bolingbrook, Illinois.

Calling it a “unique personality” CNBC reporters share the concept of this new McDonald’s restraunt along with the menu items that match this branding campaign. McDonald’s CEO Chris Kempczinski even testified to how the CosMc’s brand seeks to respond to consumer spending trends. Here’s what he said:

“This is a $100 billion category growing faster than the rest of the [informal eating-out segment] and with superior margins.”

However, this change to the McDonald’s branding campaign is just one part of the McDonald’s strategy to grow in global markets.

For McDonald’s, international marketing is a key feature of the company’s success. McDonald’s launched its original “Accelerating the Arches” strategy in 2020. The first pillar of this strategy is to “Maximize our Marketing” followed by “Commit to the Core” and “Double Down on the Three D’s” — Digital, Delivery and Drive-Thru.

In order to accelerate international business growth and consumer acquisition, the Accelerating the Arches 2.0 strategic plan unveils how McDonald’s intends to carry out this acceleration through “Development” — the fourth D — by which the reorganization plan comes back into the discussion. By cutting jobs, the company can invest more in technology and digital marketing opportunities. This is essential to keep up with its international competitors, of which they could easily lose an advantage over the local consumer market preferences.

Apparently, this strategy is working quite well at its US fast-food chains, such as the Grimace Shake marketing campaign on social media. Don’t just take my word for it, that’s what McDonald’s CEO Chris Kempczinski told investors on the company’s conference call, too.

It’s also important to illustrate how the global market trends are affecting American companies in different ways. Just look at McDonald’s social marketing campagins and its deep push into the China market, which I wrote about in a previous edition of [Industry Talk Time].

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