Low-Income Consumers Opting to Eat at Home Amid McDonald’s Decline, CEO Reveals

Chicago, IL – McDonald’s, the global fast-food giant, recently reported a decline in sales for the first time in over three years, as consumers worldwide seek more affordable dining options amidst rising inflation. The company disclosed that its sales dropped by 1 percent in the April-June quarter, marking the first decrease since the pandemic-related closures in late 2020.

The decrease in sales was more pronounced in international developmental licensed markets, where sales fell by 1.3 percent due to soft consumer sentiment in China and boycotts in the Middle East. McDonald’s CEO Chris Kempczinski noted that consumers have become more discerning in their spending habits, leading to a shift away from dining out at fast-food chains.

Kempczinski highlighted that lower-income consumers are particularly impacted, as they are opting to eat at home and find ways to save money. Despite still being perceived as a value leader in the fast-food industry, McDonald’s acknowledges that it faces a shrinking gap in value leadership compared to its competitors. The company is actively working to address this issue with urgency.

In an effort to bolster sales, McDonald’s introduced a $5 meal deal in June, which exceeded expectations and is set to be extended in most US outlets beyond August. Kempczinski expressed determination to regain market share in major markets, emphasizing that this may take time but is achievable with persistent efforts.

Despite the decline in sales, McDonald’s shares saw a 4.5 percent increase on Monday morning, as investors showed confidence in the company’s strategies to improve its performance. The fast-food chain remains focused on revitalizing growth across all key markets, aiming to secure its position in the competitive industry.