McDonald’s Traffic Declines as Economic Concerns Deter Budget-Conscious Diners
McDonald’s reported a sharper-than-anticipated drop in store traffic during the first quarter of 2025, reflecting growing economic anxiety among its core customer base. The decline was most pronounced in the United States, where same-store sales fell 3.6%—the steepest drop since the height of the pandemic in 2020.
Chairman and CEO Chris Kempczinski attributed the downturn to reduced spending from lower- and middle-income consumers, who are feeling the pinch of inflation and economic uncertainty. “Industrywide, we saw double-digit traffic declines among households earning $45,000 or less, and nearly as much among middle-income earners,” Kempczinski said during Thursday’s investor call. Only consumers with annual incomes above $100,000 maintained consistent spending patterns, he noted.
Despite the challenges, Kempczinski expressed confidence in the company’s resilience. “We believe McDonald’s is better positioned than most to navigate these conditions, but we’re not immune to broader market pressures.”
The slowdown mirrors similar trends across the fast food sector. Yum Brands, parent of Taco Bell and KFC, reported a 2% decline in U.S. same-store sales, while Chipotle also missed expectations for the quarter.
Globally, McDonald’s saw a 1% decline in same-store sales. Gains in Japan, China, and the Middle East were offset by weaker performance in markets like the U.K. Excluding the additional day from this year’s leap year, global sales were flat—falling short of Wall Street’s projection of nearly 2% growth, according to FactSet.
In response, McDonald’s is adjusting its value offerings. The company recently rolled out a U.S. “McValue” menu, allowing customers to buy a $1 item with the purchase of a full-priced meal. However, it hasn’t driven the expected sales lift. On the other hand, the $5 Meal Deal—originally launched last June and extended through 2025—continues to perform well.
Kempczinski remains optimistic about the remainder of the year. April saw strong global engagement with a promotional meal tied to the upcoming Minecraft Movie, which sold out its collectible toys in under two weeks across 100 countries. Upcoming menu items, including new chicken strips and the return of the popular Snack Wrap in the U.S., are expected to boost traffic further.
Despite macroeconomic headwinds and softer-than-expected revenue of $5.95 billion (below the $6.09 billion forecast), McDonald’s reaffirmed its full-year guidance. Net income dropped 3% to $1.86 billion, but adjusted earnings per share of $2.67 narrowly beat analyst expectations.
Kempczinski also addressed recent concerns about geopolitical sentiment. Internal surveys show that anti-American attitudes in regions like Canada and Northern Europe have not materially impacted the brand’s reputation.
McDonald’s shares fell 1% in Thursday morning trading.
