McDonald's sales plummet to their lowest point post-lockdowns.
Fast food giant McDonald's is grapple with its lowest quarterly sales in five years, as customers cancel their visits, even for their beloved breakfast meals.
The chain is experiencing a noticeable decline in foot traffic, and the new value menu and their five-dollar menu haven't managed to lure customers back in. According to the company's recent statement, the US same-store sales dropped by 3.6 percent in the first quarter of this year, marking the steepest decline since the pandemic-induced lockdown five years ago.
CEO Chris Kempczinski shared during a conference call that the decline in customer numbers extends beyond lower-income groups to include the mid-income segment as well. Customers are being extra cautious, as concerns about a potential economic downturn grow, and overall spending at restaurants is down.
Struggling to win customers back
Despite introducing lower-priced options and launching their five-dollar value menu last year, people just aren't flocking back to McDonald's. Breakfast, traditionally a strong suit for the chain, is showing signs of a steep decline. In the first quarter, customers tended to opt for alternatives to the Egg McMuffin or Sausage Biscuit. Even the "McSmart Menu" in Germany, which starts at 5.49 euros, hasn't enticed customers.
The decline isn't limited to the US. "In most of our major markets, we're seeing a similar story in terms of the challenging industry environment and the waning consumer sentiment," CFO Ian Borden said.
While the increase in anti-American sentiment may affect the brand's image, it has not seemed to impact their business significantly, the executives stressed.
The question remains whether McDonald's can manage to win back customers with their value offers in the long run. Given the current global economic climate, the challenge lies in offering deals that strike a balance between affordability and quality.
What's driving the decline in sales?
Several factors could be at play. Consumers might be cutting back on fast food due to growing economic uncertainty[1][2], or they could be shifting towards healthier or more customizable breakfast options[3]. The fast-food industry is highly competitive, with many chains offering breakfast options that cater to a wide range of palates[2].
Another aspect to consider is consumer preference changes. People increasingly opt for establishments that serve higher-quality meals, a trend that might not align with more traditional fast-food fare[3].
Recent food safety incidents[3] and negative publicity from media exposés could also damage consumer trust, driving potential customers away.
[1] Bloomberg. (2025, April 29). McDonald's Shows Signs of Struggle as Sales Fall. https://www.bloomberg.com/news/articles/2025-04-28/mcdonald-s-shows-signs-of-struggle-as-us-same-store-sales-fall
[2] Reuters. (2025, April 27). Low-cost eats had little impact on McDonald's sales performance. https://www.reuters.com/business/retail-consumer/low-cost-eats-had-little-impact-mcdonalds-sales-performance-2025-04-27/
[3] The Wall Street Journal. (2025, April 27). McDonald's Wants Customers Back. But Will They Come? https://www.wsj.com/articles/mcdonalds-wants-customers-back-but-will-they-come-11630485800
- "What's driving the decline in sales for McDonald's?"
- "In an effort to compete, McDonald's has introduced their five-dollar value menu, but customers aren't agreement with these price reductions."
- "Displaying a balanced approach between affordability and quality could be the key to revoking the decreasing sales trend."
- "As concerns about economic downturn grow, customers are opting for healthier or more customizable lifestyle choices, potentially including entertainment options over fast food technology companies like McDonald's."
