ABAN24 - The top executives of Kraft Heinz Co., Whirlpool Corp., McDonald’s and Applebee’s expressed serious concerns in their companies’ recent earnings calls that consumers are struggling to make ends meet, with some tying the situation to the Iran war.Whirlpool CEO Marc Bitzer said consumer demand for the company’s products drop 15 percent in the first quarter. For the first time in 70 years, the company suspended dividends - payments issued to shareholders as rewards for their stock ownership, The Wall Street Journal reported.“The war in Iran amplified consumer concerns about the cost of living,” Bitzer told investors on a call Thursday. Kraft Heinz CEO Steve Callihane shared a similar sentiment with the Journal Wednesday.“They’re literally running out of money at the end of the month,” Callihane said, adding, “We’re seeing negative cash flows in the lower-income brackets where they’re dipping into savings.”Millions in the US are grappling with a soaring cost of living including high gas prices, a slow job market and inflation. Some 61 percent of consumers said they disapprove of President Donald Trump’s handling of the economy, the largest share since 2022, according to a YouGov poll published this week.Since the war started two months ago, the average US gas price has shot up from around $3 a gallon to $4.55 Friday. Inflation jumped from 2.4 percent in February to 3.3 percent in March.
Trump’s top economic adviser, Kevin Hassett, sparked outrage last week when he boasted that credit card spending is “through the roof” right now.After stating the jobs market is going to be “very, very strong,” Hassett told Fox News, “In fact, I had the head of one of the big five banks in my office yesterday going through the credit card data. And just as Secretary [Scott] Bessent said, credit card spending is through the roof. They’re spending more on gasoline, but they’re spending more on everything else, too.”Major companies have tried to pivot in response to consumers tightening their belts.McDonald’s debuted a new value menu in April that features a range of breakfast, lunch and dinner items under $3. The fast-food giant’s CEO also expressed concerns about consumers’ financial resources and the company’s growth in the coming months.“Certainly, [the] consumer sentiment is heightened anxiety,” CEO Christopher Kempczinski said in an investor call Thursday.Dine Brands Global Inc., which owns sit-down restaurants such as Applebee’s and IHOP, is facing declining business from its thriftier customers.“Our value-conscious guest, our price-sensitive guest is very sensitive to increases in gas prices and the basics and the cost of living ,” CEO John Peyton said in an earnings call Wednesday. “... [They] seem to be staying home a bit more and or looking for lower cost alternatives.”
The company continues to “lean into” the Two for $25 promotion it launched in 2025, Peyton said, which offers cost-focused customers an appetizer and two entrees from a special menu.And popular fast-casual brand Panera took an unprecedented step in February to adjust to cash-strapped customers’ needs by debuting value meals for the first time in the company’s 39-year history.Whether the end of consumers’ difficulties is near is hard to say. The Trump administration has insisted on multiple occasions that prices will go down quickly once the war ends. However, the administration has not said when that will happen, leaving consumers to navigate a historically tumultuous economic season.
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