McDonald’s Reports Largest Sales Drop Since COVID
McDonald’s has just reported its largest sales decline since the pandemic. According to CNBC, weather conditions and frugal customers have caused same-store sales at U.S. locations to shrink by 3.6%, the lowest since the second quarter of 2020 during COVID, when it fell 8.7%.
“In the U.S., overall [quick-service restaurant] industry traffic from the low-income consumer cohort was down nearly double digits versus the prior year quarter,” CEO Chris Kempczinski said on a conference call. “Unlike a few months ago, QSR traffic from middle-income consumers fell nearly as much, a clear indication that the economic pressure on traffic has broadened.”
The chain’s customer base consists mostly of low to middle-income consumers. Its high-income customers, however, don’t spend enough to offset the decline. Trump’s tariffs may have influenced customer spending habits, as well, per CFO Ian Borden, who in February said he expected low same-store sales in the first quarter.
In response, McDonald’s is looking to value meals and menu deals, like the $5 meal deal, which will stick around for the remainder of 2025. The fan-favorite Snack Wrap recently returned to menus, and to celebrate the Egg McMuffin, McDonald’s launched National Egg McMuffin Day, offering the famed breakfast sandwich for $1. The strategy has already shown signs of improving same-store sales, thanks to the new McCrispy Chicken Strips.
On a company earnings call, Borden said, “In most of our major markets, we’re seeing a similar story in regards to the challenging industry environment and softening consumer sentiment.”
McDonald’s said its 2025 plan includes opening 2,200 locations and spending between $3 and $3.2 billion on capital expenditures. It expects the new restaurants to boost overall sales by over 2%.
