McDonald’s Struggles: US Sales See Sharpest Decline Since Covid, Economic Pressure Mounts

McDonald’s has just reported a turbulent first quarter of 2025, shaking investors with a significant 3.6% drop in same-store sales in its core US market—the steepest decline since the early days of the Covid-19 pandemic in 2020.

The fast-food giant blamed the slump on unfavorable weather and a clear shift in consumer spending habits. CEO Chris Kempczinski noted that traffic from low-income diners was down nearly 10% year-over-year, while middle-income customer visits also took a sharp hit—an alarming trend that hadn’t surfaced until recently.

“The economic pressure is broadening,” Kempczinski emphasized, underscoring that McDonald’s, with its heavy reliance on middle- and low-income patrons, is particularly vulnerable to these shifts. Despite wealthier consumers continuing to dine out, their spending hasn’t been enough to offset the broader traffic decline.

Global Sales Under Pressure Too

Worldwide, McDonald’s reported a 1% dip in global same-store sales, partially impacted by the extra day from last year’s leap year. Sales in its key international markets—including Australia and France—also fell by 1%, while its international developmental licensed markets (such as China, Japan, and Brazil) delivered a more positive 3.5% growth, narrowly beating analyst expectations.

The company’s Q1 revenue landed at $5.96 billion—short of Wall Street estimates—though adjusted earnings per share slightly surpassed forecasts at $2.67.

Fighting Back: Value Meals & Buzz-Worthy Menus

In response to these headwinds, McDonald’s is doubling down on value offerings and innovative menu items to lure diners back. The popular $5 meal deal will remain throughout 2025, and early sales of McCrispy Chicken Strips have already outperformed expectations—even before formal advertising kicked in. Additionally, a collaboration with Minecraft, timed with the blockbuster movie release, sparked a frenzy, with collectible items selling out in just two weeks.

Looking Ahead: Aggressive Expansion Plans

Despite current challenges, McDonald’s reaffirmed its full-year outlook, maintaining its ambitious plan to open 2,200 new restaurants and invest between $3 billion and $3.2 billion in capital expenditures. The company expects new store openings to drive a systemwide sales boost of just over 2%.

Source: CNBC 

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