McDonald’s faces major sales setback in the U.S.—Its worst since 2020
Shreeaa Rathi | TIMESOFINDIA.COM | May 01, 2025, 22:25 IST
( Image credit : AP )
McDonald's faces a challenging landscape in the U.S., where economic strains have led to a noticeable decline in sales. With many lower and middle-income families tightening their budgets, the fast-food giant is pivoting towards value-oriented promotions and innovative menu options to draw in diners.
McDonald’s is feeling the heat as shifting consumer habits and economic pressure take a bite out of its U.S. business. In its latest quarterly earnings report released Thursday, the fast-food giant revealed a 3.6% decline in same-store sales across the United States—the steepest domestic drop since the second quarter of 2020, when the COVID-19 pandemic triggered widespread shutdowns.
This marks the second consecutive quarter of falling U.S. same-store sales for McDonald’s, with the decline notably sharper than the 1.7% decrease analysts had anticipated, according to data from StreetAccount. While global inflation and fluctuating consumer confidence have impacted many in the restaurant industry, McDonald’s performance has raised eyebrows given its usual resilience during economic slowdowns.
Company leadership attributed the dip to poor weather conditions and a growing caution among consumers—particularly those from lower- and middle-income households. “In the U.S., overall quick-service restaurant traffic from the low-income consumer cohort was down nearly double digits versus the prior year quarter,” CEO Chris Kempczinski noted during the earnings 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.”
McDonald’s has long served a broad demographic, and its reliance on middle- and lower-income diners may now be working against it. Executives acknowledged that while higher-income customers continue to visit their restaurants, their spending isn’t enough to counterbalance the decline in traffic from other income groups.
Overall, McDonald’s global same-store sales dipped 1% for the quarter, which the company partially attributed to the calendar anomaly of 2024 being a leap year. Shares of the company slipped by about 1.5% in morning trading following the earnings release.
Here’s how McDonald’s performed in the first quarter compared to Wall Street expectations:
The company reported net income of $1.87 billion, or $2.60 per share—down from $1.93 billion, or $2.66 per share, in the same quarter last year. Total revenue also fell 3%.
In February, Chief Financial Officer Ian Borden predicted that the first quarter would likely mark the low point for U.S. same-store sales in 2025. This outlook factored in a sluggish start to the year, compounded by political developments like President Donald Trump’s introduction of broad tariffs, which have intensified pricing concerns among consumers.
To address these challenges, McDonald’s is doubling down on value-oriented offerings and trending menu innovations. The return of its popular Snack Wraps and the launch of New McCrispy Chicken Strips have already generated buzz, with the latter seeing strong sales ahead of its official advertising campaign. Additionally, a promotional meal tied to the Minecraft video game franchise sold out of collectible items within two weeks—a sign that strategic partnerships may offer a way forward.
Looking ahead, the company intends to maintain its $5 meal deal through the end of 2025 as part of its effort to keep cost-conscious customers engaged.
Internationally, McDonald’s also reported softness. Same-store sales in its international operated markets—covering key countries like Australia and France—fell 1%, slightly below flat expectations. In contrast, its international developmental licensed markets, which include China, Japan, and Brazil, delivered a 3.5% gain, narrowly beating forecasts.
Despite these challenges, McDonald’s reaffirmed its full-year outlook. It plans to open approximately 2,200 new restaurants and invest between $3 billion and $3.2 billion in capital expenditures in 2025. The company anticipates that these new locations will drive a modest increase in systemwide sales growth of just over 2%.
As McDonald’s navigates a tougher economic landscape both domestically and abroad, its ability to adapt with innovative offerings and pricing strategies will be critical to reversing the current downturn and regaining its momentum in the global fast-food market.
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This marks the second consecutive quarter of falling U.S. same-store sales for McDonald’s, with the decline notably sharper than the 1.7% decrease analysts had anticipated, according to data from StreetAccount. While global inflation and fluctuating consumer confidence have impacted many in the restaurant industry, McDonald’s performance has raised eyebrows given its usual resilience during economic slowdowns.
Company leadership attributed the dip to poor weather conditions and a growing caution among consumers—particularly those from lower- and middle-income households. “In the U.S., overall quick-service restaurant traffic from the low-income consumer cohort was down nearly double digits versus the prior year quarter,” CEO Chris Kempczinski noted during the earnings 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.”
McDonald’s has long served a broad demographic, and its reliance on middle- and lower-income diners may now be working against it. Executives acknowledged that while higher-income customers continue to visit their restaurants, their spending isn’t enough to counterbalance the decline in traffic from other income groups.
Overall, McDonald’s global same-store sales dipped 1% for the quarter, which the company partially attributed to the calendar anomaly of 2024 being a leap year. Shares of the company slipped by about 1.5% in morning trading following the earnings release.
Here’s how McDonald’s performed in the first quarter compared to Wall Street expectations:
- Earnings per share: $2.67 (adjusted) vs. $2.66 expected
- Revenue: $5.96 billion vs. $6.09 billion expected
In February, Chief Financial Officer Ian Borden predicted that the first quarter would likely mark the low point for U.S. same-store sales in 2025. This outlook factored in a sluggish start to the year, compounded by political developments like President Donald Trump’s introduction of broad tariffs, which have intensified pricing concerns among consumers.
To address these challenges, McDonald’s is doubling down on value-oriented offerings and trending menu innovations. The return of its popular Snack Wraps and the launch of New McCrispy Chicken Strips have already generated buzz, with the latter seeing strong sales ahead of its official advertising campaign. Additionally, a promotional meal tied to the Minecraft video game franchise sold out of collectible items within two weeks—a sign that strategic partnerships may offer a way forward.
Looking ahead, the company intends to maintain its $5 meal deal through the end of 2025 as part of its effort to keep cost-conscious customers engaged.
Internationally, McDonald’s also reported softness. Same-store sales in its international operated markets—covering key countries like Australia and France—fell 1%, slightly below flat expectations. In contrast, its international developmental licensed markets, which include China, Japan, and Brazil, delivered a 3.5% gain, narrowly beating forecasts.
Despite these challenges, McDonald’s reaffirmed its full-year outlook. It plans to open approximately 2,200 new restaurants and invest between $3 billion and $3.2 billion in capital expenditures in 2025. The company anticipates that these new locations will drive a modest increase in systemwide sales growth of just over 2%.
As McDonald’s navigates a tougher economic landscape both domestically and abroad, its ability to adapt with innovative offerings and pricing strategies will be critical to reversing the current downturn and regaining its momentum in the global fast-food market.
Would you like a visual summary or infographic to accompany this article?