McDonald’s Chairman and CEO Chris Kempchinski said the decline in low- and middle-income customers is one of the main reasons for the decline in sales.
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McDonald’s is the latest fast food chain to report declining sales amid a turbulent, volatile US economy affected by tariffs and inflation.
The Chicago, Illinois-based chain announced a decline on May 1 in its revenue report, which shared its results for the first quarter, which ended March 31st. According to the report, McDonald’s had a 3% decline in revenue, while sales of the same US store in the United States fell 3.6% from the previous year, marking the most significant decline since the 2020 COVID-9 pandamic.
“McDonald’s has a 70-year legacy of innovation, leadership and proven agility. All of these give us confidence in our ability to navigate the toughest market conditions and capture market share.” “Consumers today are tackling uncertainty, but we can always count on McDonald’s for both exciting new menu items and favourite favorites of extraordinary value from the brands they love.”
Like McDonald’s, other fast food chains have experienced similar economic issues, with some considering closures or locations like Jack in the Box, Wendy’s and Burger King. The number of struggling chains could grow as they begin to feel the impact of President Donald Trump’s tariffs.
Why is McDonald’s experiencing a decline in sales?
In its revenue call, Kempczinski attributed it to a decline in fast food industry volatility and sales to declines in low-middle-income customers compared to a year ago.
Meanwhile, high-income traffic remains stable, with McDonald’s CEO saying “it shows a split US economy, particularly middle-income consumers, being squeezed by the cumulative impact of inflation and growing anxiety about the economic outlook.”
What is McDonald’s doing to increase sales?
According to Kempczinski, McDonald’s is “expanding and improving” its value items to meet the needs of its low- and middle-income clients. He added that McDonald’s now has a “daily affordable menu” and a “entrance-level meal bundle” in each of the five Big Five internationally operated markets.
The fast food chain includes items such as McDouble, McChicken and 4-piece Chicken McNuggets at discounted prices. Additionally, McDonald’s $5 meal agreement offers a variety of classic meals.
“These are components of the meaning of good value for us,” Kempczynski said.
Kempczinski also said that McDonald’s will continue to introduce “innovative new products” like the McCripsy strip and run “world-class promotion and marketing campaigns” to bring back customers. He also referred to the McDonald’s partnership with “Minecraft Movie.” This includes “Young and Old” store collectibles.
Are all fast food chains experiencing a decline in sales?
McDonald’s and others feel the weight of a struggling US economy, but there are no other fast food chains, such as Taco Bell and Kentucky Fried Chicken (KFC). The chain has reported an increase in guest traffic due to the recent promotional deals they are pushing.
Yam! Brands, Inc. owns KFC, Taco Bell, Pizza Hut and Habit Burger Grill. reported that the first quarter (March 31) ended, up 13% overall. Taco Bell US same store saw sales growth of 9%, while KFC International’s same store saw sales growth of 7%.