McDonald’s Sees Worst U.S. Sales Drop Since 2020, Faces Rising Anti-American Sentiment Overseas

McDonald’s Faces Largest U.S. Sales Drop Since 2020, Warns of Anti-American Sentiment Overseas

In a sign of the ongoing strain on the restaurant industry, McDonald’s has reported its most significant quarterly sales decline in the U.S. since the pandemic’s peak in 2020. The fast-food giant revealed a 3.6% drop in same-store sales for the first quarter, the steepest decline since Q2 2020 when sales fell by 8.7%. This marks a bigger drop than the anticipated 1.7% decrease.

McDonald’s CEO Chris Kempczinski acknowledged the economic uncertainty that’s affecting consumers, saying that many are holding back from dining out due to rising costs. The chain specifically noted that middle-income customers have been cutting back, with some skipping breakfast entirely or opting to eat at home to save money. Lower-income diners are also avoiding the chain, though the company did see a steady flow of high-income customers.

This shift in consumer behavior mirrors broader economic trends, where those with less disposable income are limiting their spending, while wealthier consumers continue to spend freely. McDonald’s is not the only fast-food chain feeling the pinch; competitors like Chipotle, Domino’s, Pizza Hut, Shake Shack, and Starbucks have all reported slower sales recently, often citing a decline in purchases from lower-income customers.

The company also disclosed that its revenues missed forecasts for the third time in four quarters, signaling the pressure it’s under in the current economic climate.

Adding another layer of challenge, McDonald’s is encountering rising anti-American sentiment abroad, especially in Northern Europe and Canada. In a conference call with investors, McDonald’s executives mentioned that while the brand hasn’t seen a major shift in how it’s perceived, there’s been an uptick in surveys showing people are increasingly hesitant to buy American brands. This shift can be partly attributed to the political tensions and tariff policies under former President Donald Trump.

Despite these hurdles, McDonald’s remains optimistic and is sticking to its financial outlook for the year. The company plans to open 2,200 new locations worldwide in hopes of generating a modest sales boost. They’ve also seen success with promotions like their tie-in with the “Minecraft Movie” and continue to roll out value-oriented menu items to attract cost-conscious customers.

Still, company officials caution that they remain uncertain about consumer sentiment in the months ahead. The future remains unpredictable, and McDonald’s, like many businesses, is adjusting its strategy to navigate this tough economic environment.